|
| A board on a trading post on the floor of the New York Stock Exchange shows the Dow Jones industrial average with an intraday number above 15,000, Tuesday, May 7, 2013. The U.S. stock market joined a global rally Tuesday, and the Dow Jones industrial average continued to flirt with the 15,000 mark. |
NEW YORK (AP)
-- The Dow Jones industrial average punched through another milestone
Tuesday, closing above 15,000 for the first time just two months after
recovering the last of its losses from the 2008 financial crisis.
Good
economic reports, strong corporate earnings and fresh support from
central banks helped ease investor concerns about another economic
slowdown. Many had been on the lookout for signs that a spring swoon
would derail the rally, as happened in each of the past three years.
Instead, the Dow continued its epic ascent of 2013, which has seen it climb 1,952 points - almost 15 percent - since Jan. 1.
"The
thing that's been driving stocks is rising confidence," said James
Paulsen, chief investment strategist at Wells Capital Management.
"Economic growth, job creation and the housing market have been better
than expected."
The Dow closed at 15,056.20,
up 87.31 points, or 0.6 percent. The Standard & Poor's 500 index
added 8.46 points to a record 1,625.96, a gain of 0.5 percent. It has
jumped 199 points this year, or 14 percent.
The
record close extends the stock market's comeback from the depths of the
financial crisis. Both indexes reached all-time highs earlier this
year, then kept rising, largely driven by optimism that the U.S. economy
will keep gaining strength.
"We don't think
people are giving enough credit to the strength of the economy," said
Ryan Detrick, a senior technical strategist at Schaeffer's Investment
Research. "We still like the market."
Detrick
said he was particularly encouraged by the resurgence in smaller stocks,
which suggested a broad recovery beyond larger companies. The Russell
2000 index gained eight points to close at 967.82. It has risen 14
percent this year.
The S&P has climbed
higher for six straight months - the longest stretch of gains since a
seven-month run that started in March 2009, when the market hit a
financial crisis low, and ended in October 2009.
All 10 industries in the S&P 500 have joined in the rally. Health-care companies have led the way, up 19 percent.
The
Dow, S&P 500 and Russell 2000 index of small companies are all at
record highs. The sole exception is the tech-heavy Nasdaq, which remains
far below the peaks it scaled in the dot-com bubble.
Six years have passed since the Dow closed above 14,000 for the first time.
Tuesday's
gains piled up with the growing realization among investors that the
traditional threats to a rising market - higher interest rates, falling
profits, a possible recession - are unlikely to appear anytime soon.
What's more, with interest rates near record lows, investors see few
other places to put their money.
In a round of
interviews on Monday, investor Warren Buffett said the stock market
looked "reasonably priced" even after its surge. But, Buffett added,
people pay too much attention to markets reaching highs.
They ought to
pay attention when markets hit new lows.
"That's
when stocks are getting cheaper," Buffett told CNBC. "That's when
stocks are going on sale. But people do get more excited when they see
new highs."
More than 400 of the S&P 500
companies have turned in first-quarter results, and 7 out of 10 have
beaten Wall Street's earnings expectations, according to S&P Capital
IQ. Those analysts estimate that earnings increased 5 percent in the
first quarter and will pick up their pace through the rest of the year.
News
of stronger hiring over the past three months briefly propelled the Dow
over 15,000 on Friday, but it ended the week below that mark.
On
Tuesday, the U.S. market followed Japanese and European indexes higher
after they responded to good news about central bank stimulus and the
German economy. The U.S. also got a lift from higher quarterly profits
at satellite TV company DirecTV and watchmaker Fossil.
Fossil stock leapt $8.92, or 9 percent, to $107.88 after the company said higher sales lifted its earnings.
DirecTV,
the country's largest provider of satellite TV services, surged $3.99,
or 7 percent, to $61.95 after its earnings beat analysts' expectations.
The company reported more subscribers in the U.S. and Latin America.
For
the Dow, it was the 17th straight Tuesday of increases. The only day of
the week with a longer series of consecutive gains is Wednesday, which
logged a streak of 24 in 1968, Detrick said.
In
other trading, the Nasdaq composite rose 3.66 points to 3,396.63, up
0.1 percent. That's still a far cry
from its dot-com era high of 5,048
from March 10, 2000.
Japanese stocks surged,
pushing the Nikkei above 14,000 for the first time in nearly five years.
The Nikkei has jumped 36 percent this year after the Bank of Japan
announced a new aggressive monetary policy to get the country out of its
two-decade stagnation.
In Europe, Germany's
main DAX index touched a record of 8,195, bouyed by surprisingly strong
industrial orders, before falling back slightly.
In
the market for U.S government bonds, the yield on the 10-year U.S.
Treasury note edged up to 1.78 percent from 1.76 percent in late Monday
trading. Optimism over the U.S. economy has yanked the yield up over the
past week, as traders shift money out of the safety of the Treasury
market. The yield sank to its low for the year, 1.63 percent, last
Thursday.
