July 23, 2009 in Business

Dow tops 9,000 as home sales rise for 3rd month

Associated Press
 

NEW YORK — Investors celebrated news of another jump in home sales by propelling the Dow Jones industrials to their first close above 9,000 since January.

Better-than-expected profits at some of the nation’s biggest companies also lifted the market, giving the Dow a 188-point rally to finish at its highest level since November.

The Dow’s gain was the latest jump — and not even the biggest — in a surge that has lifted the index 923 points, or 11 percent, in only nine days as hopes grow about an economic recovery.

The latest climb followed a report that sales of previously occupied homes rose for the third month in a row in June. Unemployment and a weak housing market have been two of investors’ biggest worries so any sign of improvement is big news for the economy.

The National Association of Realtors said sales of previously occupied homes rose 3.6 percent in June. Sales came in at 4.89 million, above the 4.84 million analysts had been expecting.

Another batch of corporate profit reports also helped boost the market’s mood. Ford Motor Co. surprised the market with a second-quarter profit of $2.3 billion due mainly to a huge gain for debt reduction, while manufacturing conglomerate 3M Co. and candy maker Hershey Co. raised their profit forecasts for the year.

After a month of wayward trading, stocks began climbing again at the start of last week as companies like Goldman Sachs Group Inc. and Intel Corp. posted solid earnings.

“I don’t think the market is signaling that we are fully healed at all but it is telling us that there is a strong likelihood that a recovery is under way,” said Ciaran O’Kelly, head of equities, Americas, at Nomura Securities Intl. Inc. in New York.

According to preliminary calculations, the Dow rose 188.03, or 2.1 percent, to 9,069.29. It was the highest finish for the blue chips since Nov. 5 and the first time the Dow has traded or closed above 9,000 since January.

The Standard & Poor’s 500 index rose 22.22, or 2.3 percent, to 976.29. It hasn’t traded or closed above 1,000 since early November.

The Nasdaq composite index rose 47.22, or 2.5 percent, to 1,973.60, its 12th straight advance. The Nasdaq hasn’t had a rally that long since a streak that ended Jan. 8, 1992.

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