Dow closes above 12,800 for first time
NEW YORK » The Dow Jones industrial average closed above 12,800 for the first time yesterday, signaling Wall Street's recovery from its steep decline in February as investors rewarded companies with strong earnings.
The day was not a standout for the overall market, however. Technology stocks lagged following disappointing earnings from leaders including Yahoo Inc.
The Dow moved as high as 12,838.46 before slipping back slightly to close at 12,803.84, breaking records set on Feb. 20, one week before the average tumbled 416 points in a worldwide selloff.
As only 11 of the 30 stocks in the blue chip index advanced, the Dow's gain yesterday came from strength in stocks like JP Morgan Chase & Co., Boeing Co. and Caterpillar Inc.
JPMorgan lifted the Dow after the bank reported a 55 percent jump in profits that far surpassed Wall Street's expectations. The companies that make up the Dow have been mostly beating the Street's predictions.
Broader stock indicators finished mixed. The Standard & Poor's 500 index rose 1.02, or 0.07 percent, to 1,472.50, but the Nasdaq composite index fell 6.45, or 0.26 percent, to 2,510.50.
The Russell 2000 index of smaller companies fell 4.58, or 0.55 percent, to 824.38.
Declining issues led advancers 9 to 7 on the New York Stock Exchange, where volume came to 1.61 billion shares compared with volume of 1.57 billion shares traded Tuesday.
Bond prices rose for the third-straight session as investors grew optimistic that the Federal Reserve won't raise interest rates.
The yield on the benchmark 10-year Treasury note fell to 4.66 percent from 4.69 percent late Tuesday. Gold prices also advanced.
Light, sweet crude settled up 3 cents at $63.13 per barrel on the New York Mercantile Exchange as a government report showed a bigger-than-expected decline in gasoline inventories.
The U.S. Energy Information Administration said stockpiles dropped 2.7 million barrels to 197 million barrels.
Investors pulled back from tech stocks after Yahoo posted a surprising 11 percent drop in its first-quarter profit. Disappointing results from International Business Machines Corp. and Motorola Inc. added to the selling.
Yahoo plunged $3.78, or 11.8 percent, to $28.31 after the Internet portal reported disappointing results late Tuesday.
Mike Malone, a trading analyst at Cowen & Co., said results from Yahoo stunted some of the market's appetite for technology issues. However, he dismissed the notion that Yahoo's earnings marked the start of a trend.
Pressure was felt elsewhere in the tech sector. IBM posted disappointing results late Tuesday, and its shares dropped $2.32, or 2.4 percent, to $94.80. Hard driver maker Seagate Technology LLC fell 85 cents, or 3.8 percent, to $21.30 after it reported profit fell 22 percent in the first quarter, and lowered its forecast.
Motorola reported a first-quarter loss due to sluggish sales, and charges to cover a legal settlement and restructuring efforts. However, sales surpassed expectations and the stock rose 27 cents to $18.22.