Closing Market Report
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Wall Street resumes fourth-quarter rally
By Madlen Read
Associated Press
NEW YORK » Wall Street resumed its fourth-quarter rally yesterday, pushing the Dow Jones industrials to its first close above 12,400 after a series of strong company earnings and a drop in unemployment claims revived investors' confidence in the economy.
The market, which stalled earlier this week on interest rate and economic concerns, was reinvigorated by robust quarterly profits from Bear Stearns Cos., Lehman Brothers Holdings Inc., and Costco Wholesale Corp., as well as healthy outlooks from Citigroup Inc. and Honeywell International.
Wall Street was also boosted by the U.S. Labor Department's report that the number of Americans filing for unemployment benefits plunged for a second straight week. The data suggested the U.S. economy won't cool as quickly as some investors feared.
"As far as I can tell, consumers keep spending as long as unemployment is low," said Ed Peters, chief investment officer at PanAgora Asset Management Inc.
Airline stocks were pummeled by rising oil prices, after the Organization of Petroleum Exporting Countries said it is keeping its oil production target stable for now, but making cuts in February. Overall, though, the stock market was unfazed by the possibility of higher fuel prices dampening consumer spending and hiking companies' materials costs.
The Dow rose 99.26, or 0.81 percent, to a new closing record of 12,416.76, after hitting a new trading high of 12,431.26 earlier in the session. The Dow, which last hit a record close of 12,342.56 on Nov. 17, is up 16 percent this year.
Broader stock indicators also rose sharply. The Standard & Poor's 500 index climbed 12.28, or 0.87 percent, to a six-year record of 1,425.49, after reaching a six-year trading high of 1,427.23. The technology-laden Nasdaq composite index rose 21.44, or 0.88 percent, to 2,453.85.
The Russell 2000 index of smaller companies was up 5.47, or 0.69 percent, at 794.22.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.75 billion shares, compared to 2.59 billion on Wednesday.
Bond prices fell again Thursday, with the yield on the benchmark 10-year Treasury note rising to 4.60 percent from 4.58 percent late Wednesday.
The dollar rose against other major currencies, while gold prices slipped.
Oil prices shot higher after the OPEC announcement. Crude oil for January soared $1.14 to settle at $62.51 a barrel on the New York Mercantile Exchange.