December 22, 2004 in Business

Resurgent Dow hits 3 1/2-year high

Associated Press
 

NEW YORK — The stock market barreled higher Tuesday, sending the Dow Jones industrials to a new 3 1/2 year high as two Wall Street firms reported better-than-expected earnings and a brokerage gave tech bellwether Intel Corp. a ratings upgrade.

Stocks have climbed steadily since the presidential elections, with good economic data and positive profit forecasts for 2005 assuring investors of further returns. The markets also benefited from the traditional “Santa Claus” rally, as mutual funds and money managers shuffle their portfolio before year’s end.

“The company news that we’ve seen over the past few days has been, on balance, positive, and that’s giving investors the courage to buy,” said Hugh Johnson, chief investment officer for First Albany Corp. “There’s definitely some window dressing going on as well, where you have portfolio managers making sure they have good performing stocks in their portfolios before year’s end. But for the most part, investors seem to be in a holiday mood.”

The Dow rose 97.83, or 0.92 percent, to 10,759.43. It was the best close for the Dow since June 13, 2001, surpassing the previous 2004 high of 10,737.70 set on Feb. 11.

Broader stock indicators also made substantial gains. The Standard & Poor’s 500 index was up 10.78, or 0.9 percent, at 1,205.43, just below the 3 1/2 -year high of 1,205.72 set on Wednesday. The Nasdaq composite index gained 23.06, or 1.08 percent, to 2,150.91, less than 12 points shy of last Wednesday’s multiyear high.

Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee, said the market was being driven by an overall positive outlook for the economy, lower oil prices, historically low interest rates as well as seasonal buying that tends to lift shares in the last weeks of the year.

“There’s a lot of positives going on right now,” Berman said. “Even on the days where there has been bad news, the market has rebounded really well.”

Advancing issues outnumbered decliners by more than 5 to 2 on the New York Stock Exchange, where volume came to 1.12 billion shares, compared with 1.11 billion at the same point on Monday.

The Russell 2000 index of smaller companies was up 8.15, or 1.28 percent, at 646.20.

Overseas, Japan’s Nikkei stock average rose 0.2 percent. In Europe, Britain’s FTSE 100 closed up 0.04 percent, France’s CAC-40 gained 0.16 percent for the session, and Germany’s DAX index climbed 0.07 percent.

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