Dow sets new high once more
Wall Street extended its record-setting rally today as a sharp drop in oil prices and a surprise jump in the US gross domestic product encouraged buying.
The Dow Jones industrials and the Standard & Poor’s 500 index both reached new three-and-a-half year highs.
The market’s buying momentum surged when crude oil futures plummeted in response to the US Energy Department’s report of an increase of 2.1 million barrels in the nation’s petroleum reserve last week. Demand for petrol also fell.
Wall Street also welcomed the Commerce Department’s final third-quarter GDP reading, which rose to 4% from previous estimates of 3.9%.
“Right now, the market is moving on any headline that moves over the wires, and right now the news is pretty good,” said Jack Caffrey, equities strategist at JP Morgan Private Bank.
“That’s what happens in a slow week, like we’re having. We’ll probably drift higher this way until earnings season next month.”
The Dow rose 56.46, or 0.52%, to 10,815.89, surpassing the three-and-a-half year high reached yesterday.
The Dow last closed above 10,800 on June 13, 2001.
Broader stock indicators were moderately higher. The S&P 500 was up 4.12, or 0.34%, at 1,209.57, bettering the three-and-a-half year high set last Wednesday.
The Nasdaq composite index gained 6.12, or 0.28%, to 2,157.03, less than six points off its multi-year high set last week.
The GDP report gave many investors hope that the fourth-quarter reading will be stronger than expected. Analysts had feared that low job growth and high energy prices would stifle economic growth.
Oil prices, in particular, were seen as an extra drain on consumers’ incomes, but the Commerce Department figure, along with the Energy Department’s inventory report, assuaged some of those concerns.
“Any time you’re up the day after you set new highs, that’s a great sign,” said Neil Massa, equity trader at John Hancock Funds. “Long term, of course, whether we can sustain it remains to be seen. But I do think that, without any major surprises, we’ll be up the rest of the year.”
Advancing issues outnumbered decliners by nearly 8 to 5 on the New York Stock Exchange, where volume came to 1.39 billion shares, compared with 1.48 billion on yesterday.
The Russell 2000 index of smaller companies was up 2.26, or 0.35%, at 648.46.
