Dow Jones average surges past 13,000
NEW YORK » It looks like cause for celebration: The Dow Jones industrial average surged from 12,000 to 13,000 in just six months. But appearances can be deceiving, and there may be more reason to worry than rejoice about Wall Street's latest accomplishment.
Stronger-than-expected profits from several large companies helped push the stock market to historical heights. But many big corporations, including the Dow components, made a chunk of that money overseas, where economies are growing faster than in the United States.
Still, the stock market's best-known indicator swept past its latest milestone shortly after trading began yesterday, and even made it past 13,100, rising as high as 13,107.45.
It closed at 13,089.89, up 135.95, or 1.05 percent.
The broader market shared in the rally. The Standard & Poor's 500 index rose 15.01, or 1.01 percent, to 1,495.42, after reaching 1,496.59, a six-and-a-half-year high.
The technology-dominated Nasdaq composite index advanced 23.35, or 0.92 percent, to 2,547.89, after hitting a six-year high of 2,551.39.
And the Russell 2000 index, which reflects the performance of smaller companies, inched past a record close set earlier this month, rising 5.71, or 0.69 percent, to 832.07.
Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to 1.68 billion shares.
Inflation could re-emerge as an obstacle to the stock market's uptrend if energy costs keep surging. Yesterday, crude oil futures settled up $1.26 to $65.64 per barrel and gasoline futures rose to 8 1/2-month highs on the New York Mercantile Exchange, after the U.S. Energy Department reported a decline in U.S. gasoline inventories.
Bonds fell after the positive economic data and amid the advance in stocks. The yield on the benchmark 10-year Treasury note rose to 4.65 percent from 4.62 percent late Tuesday.
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 the blue chips took to go from 11,000 to 12,000. 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.
About two-thirds of U.S. companies so far have reported earnings that were in line with or higher than analyst expectations, said Jim Herrick, director of equity trading at Baird & Co.
The biggest gainer among the 30 Dow industrials was Alcoa Inc. The aluminum producer said yesterday it is considering selling its packaging and consumer businesses, which account for about 10 percent of annual revenue. Alcoa rose $1.81, or 5.3 percent, to $35.76.
The technology-dominated Nasdaq was lifted by Amazon.com, which reported late Tuesday that its first-quarter profit more than doubled, besting analyst estimates. The Web retailer also boosted its revenue forecast for the year, reassuring investors that technology companies have the potential to keep posting profits. Amazon rose $12.06, or 27 percent, to $56.81.