S&P 500 pushes further into record territory; Google tops $1K

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NEW YORK — Investors shifted their focus from politics to profits on Friday and liked what they saw, pushing the Standard & Poor's 500 index further into record territory.

Two days after Congress struck a last-minute deal to keep the U.S. from a devastating default on its debt, investors were bidding up stocks on surprisingly good profits from companies in industries both old and new.

General Electric and Morgan Stanley rose after reporting higher earnings than financial analysts had expected. Google surged nearly 14 percent, topping $1,000 a share for the first time.

"We've moved from the dysfunction of Washington to the reality of the global economy, and it looks pretty good," said Ron Florance, deputy chief investment officer at Wells Fargo Private Bank.

Investors were also encouraged by a rebound in Chinese economic growth in the latest quarter.

The rise in stocks follows a budget standoff in Washington that kept hundreds of thousands of federal workers from their jobs for 16 days and could have forced the government to miss payments on its debt. Congress agreed Wednesday to fund the government and allow it to borrow through early next year.

The S&P 500 set a record for the second straight day. The broad index of 500 companies, up 22 percent this year, added 11.35 points, or 0.7 percent, to a record 1,744.50. The gain this year is the index's best since 2009, when it began its bull run. Since its recession low in March of that year, the S&P 500 has soared 158 percent, driven largely by a rebound in earnings, a housing recovery, greater investor confidence and the economic stimulus program by the Federal Reserve.

The Nasdaq composite was up 51.13 points, or 1.3 percent, at 3,914.28. The Dow Jones industrial average rose 28 points, or 0.2 percent, to 15,399.65, and is 277 points below its own record.

Christine Short, a senior manager at S&P Capital IQ, said investors are relieved that Washington pulled back from the abyss by extending the U.S. borrowing authority until Feb. 7. But she's not so sure how long the celebratory mood might last.

"We just bought ourselves a little more time, and the market seems to like that," she said. "But we're likely to go through the same cycle again in three months."