Dow Crosses 13,000 for 1st Time
Wednesday April 25, 11:20 am ET
By Madlen Read, AP Business Writer
NEW YORK (AP) — The Dow Jones industrial average shot past 13,000 for the first time Wednesday, powered by signs that the U.S. economy and corporate profits are growing at a steady pace.
The stock market’s best-known indicator surged past its latest milestone shortly after the opening of trading, and continued rising to 13,036.99 before retracing some of its steps and hovering below the 13,000 mark.
The Dow climbed to a new record as many of the country’s biggest companies surpassed analysts’ first-quarter earnings projections. Among those beating forecasts Wednesday: soft drink maker PepsiCo Inc., materials manufacturer Corning Inc., consumer products company Colgate-Palmolive Co. and Dow component Boeing Co.
Wall Street got an additional lift from the Commerce Department’s report of durable goods orders last month, which showed a robust gain in business capital goods. The data reassured investors that demand for U.S. products remains strong, lending support to the economy. The department also reported that sales of new homes rebounded slightly in March, as the market expected.
The earnings and economic data indicated slow, stable growth — an ideal situation for investors, who hope the Federal Reserve will abstain from raising interest rates to curb inflation.
“The U.S. economy is in pretty good shape,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “We want slow earnings growth. We want slow economic growth. It keeps the Fed on the sidelines.”
It took the Dow just 129 trading days, since Oct. 18, to make the trek from 12,000 to 13,000, far less than the 7 1/2 years that the blue chips took to go from 11,000 to 12,000. But the swiftness of this latest trip does recall the days of the dot-com boom when the major indexes were soaring and it took the Dow a mere 24 days to barrel from 10,000 to 11,000.
In the first hour of trading, the Dow was up 29.90, or 0.23 percent, at 12,983.84. The index typically has retreated after crossing big milestones in the past.
The broader Standard & Poor’s 500 index was up 3.77, or 0.25 percent, at 1,484.18, while the technology-dominated Nasdaq composite index was up 4.00, or 0.16, at 2,528.54.
Bonds slipped on the positive economic data, with the yield on the benchmark 10-year Treasury note rising to 4.64 percent from 4.62 percent late Tuesday.
The Dow was the first of the major indexes to recover from the stock market’s prolonged slump in the early part of the decade. The S&P 500 has yet to reach its closing peak of 1,527.46, reached in March 2000, and no one expects the Nasdaq to reach its record of 5,048.62, also reached in March 2000, anytime soon.
Still, the Dow’s latest achievement did not come without setbacks and volatility — the index lost 416 points in a single session, on Feb. 27, amid fears that the U.S. economy would fall into recession and that China’s economy would slow as well. And Wall Street has had periodic shudders over signs that inflation might be getting out of hand — a trend that would lead the Federal Reserve to resume interest rate hikes — and over data that showed continuing weakness in the housing market.
Just two weeks ago, the Dow fell nearly 90 points after minutes from the last Fed meeting showed the central bank’s level of concern about inflation.
Gold rose, while the dollar approached a record low against the euro.
Crude oil prices rose 64 cents to $65.22 a barrel on the New York Mercantile Exchange, after the Energy Department reported a decline in U.S. gasoline inventories.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume came to 390.1 million shares.
The Russell 2000 index of smaller companies was up 1.00, or 0.12 percent, at 827.36.
Overseas, Japan’s Nikkei stock average fell 1.24 percent. Britain’s FTSE 100 was up 0.58 percent, Germany’s DAX index was up 1.04 percent, and France’s CAC-40 was up 1.30 percent.
Source: Yahoo! Finance