Dow hits record high after Bernanke remarks
NEW YORK » The Dow Jones industrials set new highs yesterday when stocks extended their gains for a second day after Federal Reserve Chairman Ben Bernanke told a Senate panel the economy should grow modestly this year and that he expects inflation will continue to ease.
Wall Street, which had faced some concern about whether Bernanke might sound a hawkish note on inflation, welcomed his benign remarks. Wall Street appeared more confident the central bank was at least likely to leave rates unchanged, as it has in recent meetings.
Investors pleased by a sense that the overall economy is doing well managed to look past a U.S. Commerce Department report that retail sales were essentially flat in January amid slumping automobile sales. It was the weakest showing in three months and below what Wall Street had forecast.
News that DaimlerChrysler AG plans to chop 3,000 Chrysler workers under a plan to restore the U.S. operations' profitability by next year pleased investors. But Coca-Cola Co.'s earnings disappointed Wall Street.
The Dow Jones industrial average rose 87.01, or 0.69 percent, to 12,741.86. The Dow set an intraday high of 12,759.40, eclipsing a high of 12,700.28 set Feb. 7.
The blue chip average also finished at a new high, its 28th record close since the start of October. The previous record, set Feb. 1, was 12,673.68.
Yesterday marked the first time since March 17, 1998, the Dow industrials, transportation and utilities averages have closed at simultaneous highs. Such an alignment has now occurred only 20 times since 1929. The New York Stock Exchange Composite index closed at a record high 9,427.31.
Other stock indicators also climbed yesterday. The Standard & Poor's 500 index rose 11.04, or 0.76 percent, to 1,455.30. The large-cap index is trading at its highest level in more than six years.
The Nasdaq composite index gained 28.50, or 1.16 percent, rising to 2,488.38. The Russell 2000 index of smaller companies rose 1.46, or 0.18 percent, to 813.99. The Russell also set a new intraday high of 818.19, edging past a high of 817.01 set Friday.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 2.71 billion.
Bonds rose sharply following Bernanke's testimony, with the yield on the benchmark 10-year Treasury note falling to 4.74 percent from 4.81 percent late Tuesday. The dollar was lower versus most major currencies, except the yen. Gold prices rose.
Light, sweet crude settled down $1.06 at $58 per barrel on the New York Mercantile Exchange after inventory data showed stores of distillates such as home heating oil fell by less expected.