Dow passes 12,000, then retreats
The Dow Jones industrial average briefly swept past 12,000 for the first time Wednesday, extending its march into record territory as investors grow increasingly optimistic about corporate earnings and the economy. The blue chip average rose to a new closing high, but fell just short of the 12,000 mark.
The index of 30 big-name stocks surpassed the milestone just after trading began, rising as high as 12,049.51, before pulling back as the market’s initial wave of enthusiasm dissipated and investors cashed in some of their gains. The fact that the markets didn’t barrel higher shows some healthy caution particularly given that many companies have yet to report third-quarter results.
It took the Dow 7 1/2 years to make the trip from 11,000, having been pummeled during that time by the dot-com bust, recession and the aftermath of the 2001 terror attacks. That slow trek was a striking contrast with the Dow’s sprint from 10,000 to 11,000 in just 24 trading days in the spring of 1999, during the heady days of the Internet boom.
The Dow, whose stocks include blue chips such as International Business Machines Corp., Microsoft Corp. and Wal-Mart Stores Inc., has risen 312 points so far this month as oil prices retreated below $60 a barrel and it appeared the economy was headed for a soft landing after more than two years of interest rate increases. Wednesday’s closing record was the Dow’s eighth in little more than two weeks.
The Dow’s quick move past 12,000 Wednesday came after a Labor Department report indicated consumer price pressures are leveling off and third-quarter earnings reports from companies including IBM bolstered confidence.
The Dow closed up 42.66, or 0.36 percent, at 11,992.68. The previous closing high of 11,980.60 was set Monday.
Broader stock indicators were mixed. The Standard & Poor’s 500 index was up 1.91, or 0.14 percent, at 1,365.96, and the Nasdaq composite index fell 7.80, or 0.33 percent, to 2,337.15.
Bonds rose, with the yield on the benchmark 10-year Treasury falling to 4.76 percent from 4.77 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude settled down $1.28 at $57.65 a barrel on the New York Mercantile Exchange amid growing concern ahead of an OPEC meeting Thursday; doubts have swirled over whether OPEC’s members can agree on an immediate production cut.
Some analysts downplayed the Dow’s achievement, noting that many smaller stocks had already recovered.
“Focusing on this one index is very short sighted,” said Tom McManus, an investment strategist with Banc of America Securities. “What you’re seeing here is the mega-cap stocks playing catch up to the rest of the market, and not even doing it robustly either. We’ve seen very impressive gains for the so-called broad market, but the Dow just isn’t as relevant any longer.”
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to 2.62 billion shares, compared with 2.49 billion shares Tuesday.
The Russell 2000 index of smaller companies was down 1.50, or 0.20 percent, at 763.41.
Overseas, Japan’s Nikkei stock average closed up 0.25 percent. Britain’s FTSE 100 closed up 0.68 percent, Germany’s DAX index was up 1.11 percent, and France’s CAC-40 was up 1.10 percent.