NEW YORK — Wall Street shot higher today, sending the Standard & Poor's 500 index to its first record close in more than seven years, as investors grew more confident the Federal Reserve might cut interest rates in the second half of 2007. The Dow Jones industrials also closed at a new high.

The S&P 500, considered by traders as the best barometer of U.S. stocks, surpassed the record of 1,527.46, set March 24, 2000, at the peak of the dot-com boom, closing at 1,530.23, up 12.12, or 0.80 percent, according to preliminary calculations.

The index of 500 of the nation's biggest companies was powered by investors' relief over the minutes from the Fed's May 9 meeting of its Open Market Committee. The central bankers called inflation "uncomfortably high," a stance that made it less likely that the Fed would cut interest rates.

However, analysts said central bankers indicated in the minutes that the economy will continue to accelerate, and that raised the possibility the Fed hasn't ruled out lowering rates.

Fed fears inflation

WASHINGTON — Concerns about inflation trumped worries about the slumping housing market last month in the minds of Federal Reserve officials who voted to hold interest rates steady.

While Fed officials said the downturn in housing was turning out to be more severe than expected, worries about inflation continued to dominate the May 9 discussions among Fed Chairman Ben Bernanke and his colleagues, according to minutes of the closed-door discussions released today.

The Fed on May 9 left the federal funds rate unchanged at 5.25 percent. It marked the 7th straight Fed meeting — over nearly a year — in which the central bank has held the rate steady.

Many economists said the minutes strongly suggest the central bank may be content to keep rates unchanged for the rest of the year.

Ernst & Young figures charged

NEW YORK — Four current and former partners of the accounting firm Ernst & Young were charged today with fraud and other crimes relating to tax shelters that helped the wealthy escape taxes on incomes exceeding $10 million.

All four worked in a group set up by the company in 1998 to develop tax shelters, according to an indictment filed in U.S. District Court in Manhattan. The men allegedly defrauded the Internal Revenue Service from 1998 through 2004 by designing, marketing and selling fraudulent tax shelters.

U.S. Attorney Michael Garcia said in a statement that the indictment targets "tax professionals whose deceit costs this country untold millions in tax revenues."

Ernst & Young said in a statement that it has cooperated with the government from the start of the investigation and has voluntarily made changes to its tax practice.

The indictment said the four men knew that if the IRS discovered the tax shelters, it would aggressively challenge the claimed tax benefits.

IBM lays of 1,570

BOSTON — IBM Corp. laid off 1,570 people today, primarily from an ongoing overhaul of operations in its giant technology services unit.

The Armonk, N.Y.-based company carried out a similar number of job cuts at the beginning of the month, for a total of 3,023 this quarter and 3,720 for the year, according to IBM spokesman Edward Barbini.

That amounts to roughly 1 percent of the company, which employed 355,000 people at the beginning of the year. But even these small numbers reflect a big project within IBM to transform the business.

Services is IBM's biggest division by revenue, but the advent of lower-cost competition overseas has forced IBM to work harder to improve the unit's profit margins. In the first quarter, pretax income for IBM's tech services fell 19 percent, even as revenue rose 7 percent.

Chinese market takes a dive

BEIJING — Chinese stocks plunged today after the government raised a tax on share trades, trying to cool a market boom amid growing concerns about a possible bubble.

The main Shanghai Composite Index tumbled 6.5 percent to 4,071.27 Today after hitting a record high yesterday. The Shenzhen Composite Index for China's smaller second market fell even more, closing down 7.2 percent at 1,199.45.

The decline in Chinese shares hit other markets, too, although not as dramatically as on Feb. 27, when investors around the world flinched from a nearly 9 percent slide in the Shanghai index.

The retreat in Chinese shares came after the Finance Ministry tripled the "stamp tax" on stock trades from 0.1 percent to 0.3 percent, effective Today. The ministry was trying to "cool (the) stock market," the official Xinhua News Agency said.

Zoellick named to World Bank

WASHINGTON— President Bush today tapped his former trade chief and No. 2 diplomat, Robert Zoellick, to run the World Bank, embarking on a process to mend wounds inflicted by outgoing president Paul Wolfowitz.

Zoellick, 53, would succeed Wolfowitz, who is stepping down June 30 after findings by a special bank panel that he broke bank rules when he arranged a hefty compensation package in 2005 for his girlfriend, Shaha Riza, a bank employee.

Bush's selection of Zoellick must be approved by the World Bank's 24-member board.

The controversy over Wolfowitz caused a staff revolt and strained U.S. relations with other countries and led to calls for him to resign from the poverty-fighting institution.

In tapping Zoellick, Bush picked a seasoned veteran of politics both inside the Beltway and on the international stage.

Airbus gets Qatar order

PARIS — Ailing Airbus got a reprieve today in its battle with Boeing Co. for the market in long-range, mid-sized aircraft, when Qatar Airways ordered another 20 of the European plane maker's planned A350 jets.

The agreement means Airbus now has 268 orders for the wide-body plane that is not expected to be ready until 2013. Many orders — including the Qatar deal — are unconfirmed, but Chief Operating Officer John Leahy said he hopes for more than 200 firm orders by the end of the year. That's still far behind the 584 orders Boeing has for its equivalent 787 Dreamliner, due to enter commercial service next May.

With the deal, Qatar Airways increased an initial "memorandum of understanding" for 80 Airbus A350 XWBs. At the list price, that would amount to a total of $16 billion, Chief Executive Louis Gallois said.

As with most large orders, the deal will likely come with deep discounts.

Apple sells tunes without DRM

SAN JOSE, Calif. — Apple Inc.'s iTunes Store started selling thousands of songs without copy protection today, marking the trendsetting company's latest coup and a model for what analysts say will likely become a pattern for online music sales.

Launching initially with songs from music company EMI Group PLC, iTunes Plus features tracks that are free of digital rights management, or DRM, technology — copy-protection software that limits where songs or movies can be played and distributed.

The unrestricted content means some songs purchased from iTunes will work for the first time directly on portable players other than Apple's iPod, including Microsoft Corp.'s Zune.

The inaugural batch of iTunes Plus songs includes music from Coldplay, The Rolling Stones, Norah Jones, Frank Sinatra, Pink Floyd and more than a dozen of Paul McCartney's classic albums.

ACLU suing Boeing subsidiary

NEW YORK — The American Civil Liberties Union said today it is suing Jeppesen Dataplan Inc., a subsidiary of Boeing Co., claiming it secretly flew three of the CIA's terrorism suspects overseas, where they were tortured.

The cases involve allegations of mistreatment of Binyam Mohamed, an Ethiopian citizen, in July 2002 and January 2004; Elkassim Britel, an Italian citizen, in May 2002; and Ahmed Agiza, an Egyptian citizen, in December 2001.

Mohamed is being held in Guantanamo Bay, Cuba; Britel in Morocco; and Agiza in Egypt, the ACLU said in a news release.

Mike Pound, a spokesman for Englewood, Colo.-based Jeppesen, said company officials had not seen the lawsuit and had no immediate comment. He said Jeppesen, a subsidiary of Boeing Commercial Aviation Services, provides support services, rather than the flights themselves.

Stock indexes, oil and gas prices

The S&P 500 surpassed the record of 1,527.46, set March 24, 2000, closing at 1,530.23, up 12.12, or 0.80 percent, according to preliminary calculations.

The Dow closed at 13,633.08, up 111.74, or 0.83 percent, and also reached a new trading high of 13,636.09.

The Nasdaq closed up 20.53, or 0.80 percent, at 2,592.59.

In the futures markets, gasoline for June delivery fell 2.54 cents to settle at $2.2725 a gallon on the New York Mercantile Exchange.

Light, sweet crude for July delivery rose 34 cents to settle at $63.49 a barrel on the Nymex.

Also on the Nymex, heating oil futures fell 0.65 cent to settle at $1.8755 a gallon, while natural gas prices rose 21 cents to settle at $7.941 per 1,000 cubic feet.