Factory orders push Dow up 75
Stocks jumped Wednesday, sending the Dow Jones industrials past 13,200 for the first time after a strong reading on U.S. factory orders stoked investor optimism about the economy. The Dow gained more than 75 points and secured its second straight record close.
The Commerce Department said orders to U.S. factories rose 3.1 percent in March – the largest increase in a year – amid strong demand for commercial aircraft and a sharp rise in an indicator of how much companies are investing in their business. The increase easily outpaced the 2 percent rise analysts had been expecting.
As investors begin to look toward Friday’s Labor Department reports on March job creation and unemployment, they are also keeping watch over corporate profits as they try to determine how quickly the economy might be slowing and whether the stronger-than-expected earnings might continue to give stocks a lift.
Time Warner Inc. and Yum Brands Inc., parent of fast-food chains KFC, Taco Bell and Pizza Hut, each reported robust quarterly results.
“The stronger-than-anticipated earnings releases have definitely been the catalysts for prices to move higher and the merger deals continue to reduce shares in the market and put fresh cash back in investors’ hands,” said Tim Hartzell, chief investment officer at Kanaly Trust Co.
The Dow rose 75.74, or 0.58 percent, to 13,211.88. The blue chip index hit a fresh trading high of 13,256.33 after reaching 13,184.14 Tuesday. The Dow has set 16 record closes this year and 39 since the beginning of October; the latest closing high came Tuesday.
Broader stock indicators also rose Wednesday. The Standard & Poor’s 500 index advanced 9.62, or 0.65 percent, to 1,495.92. Wall Street has been eyeing the index, waiting for it to move back above 1,500; the S&P 500 hasn’t closed above that level since September 2000.
The Nasdaq composite index rose 26.31, or 1.04 percent, to 2,557.84.
Bonds fell following release of the factory order data. The yield on the benchmark 10-year Treasury note rose to 4.65 from 4.64 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell 77 cents to $63.66 per barrel on the New York Mercantile Exchange after weekly government figures showed larger-than-expected domestic supplies.
In what some investors perhaps regarded as an early read on Friday’s jobs numbers, an employment indicator published by ADP and Macroeconomic Advisers reported an increase of 64,000 in private jobs in April. A healthy job market is important because worries about jobs could push consumers to curb their spending.
Advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, where volume came to 1.68 billion shares, down from 1.78 billion shares on Tuesday.
The Russell 2000 index of smaller companies rose 12.21, or 1.50 percent, to 828.46.
Overseas, Japan’s Nikkei stock average closed up 0.69 percent. Britain’s FTSE 100 finished up 1.01 percent, Germany’s DAX index advanced 0.64 percent, and France’s CAC-40 rose 0.50 percent.