Upbeat economic news edges Dow near record
NEW YORK – The Dow came within 60 points of its all-time high Wednesday, rising sharply for a second-straight day.
The market surged following more evidence that the Fed will keep interest rates low, housing will keep recovering and shoppers aren’t pulling back on spending, though they’re paying more in Social Security taxes this year.
The gains were broad: Twenty-nine of 30 stocks in the Dow Jones industrial average rose. All 10 industries in the Standard and Poor’s 500 index climbed.
The Dow Jones industrial average closed up 175.24 points, or 1.2 percent, to 14,075.37. The index is now 89 points from its record close of 14,164.53 reached in October 2007. It rose steadily from the opening bell, then peaked near the record at 3:26 p.m. Eastern Time, before easing slightly in the last half-hour of trade.
The Dow has surged 290 points in the past two days, erasing its drop of 216 points Monday.
“The market psychology has clearly shifted. It’s no longer sell the rally, it’s buy the dips,” said Dan Veru, chief investment officer of Palisade Capital Management. “The economic data continues to be strong.”
The Standard and Poor’s 500 index gained 19.05 points, or 1.3 percent, to 1,515.99. That put it within 49 points of its record close of 1,565, also in October 2007.
The Nasdaq composite rose 32.61 points, or 1.3 percent, to 3,162.26.
Investors were also encouraged Wednesday that Federal Reserve Chairman Ben Bernanke stood behind the central bank’s low-interest-rate policies as he faced the House Financial Services Committee.
Also, the number of Americans who signed contracts to buy homes rose in January from December to the highest level in almost three years. The report continued a string of positive housing news. Sales of new homes jumped 16 percent last month to the highest level since July 2008, the government reported Tuesday.
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