The Standard & Poor’s 500 index had its first record close in more than seven years yesterday as investors grew more confident that Federal Reserve policy-makers will cut interest rates in the second half of 2007, the Associated Press reported.

Considered by traders to be the best measure of U.S. stocks, the S&P closed at 1,530.23, beating a record of 1,527.46 achieved March 24, 2000, during the peak of the dot-com boom.

The Dow Jones industrial average, which has had 47 record closes since October 2006, also set a record by closing at 13,633.08.

The records came after the markets opened sharply lower yesterday, following a pullback in the Chinese stock markets, a sign that China’s markets may not trigger a global sell-off. The S&P 500 has fewer technology stocks than in 2000 and is now dominated by financial services companies, which have been driving the index since the second half of last year.