Stocks continue steady climb
Dow sees best level since 2008, joining S&P and Nasdaq gains
NEW YORK – The stock market has a new formula for success: a slow and steady trek higher.
The Dow Jones industrial average rose 48 points Wednesday in its seventh straight advance to close at a new high for 2010. The gain means the Dow has joined the Standard & Poor’s 500 index and Nasdaq composite index in reaching the best levels since 2008.
Stocks reached the new highs by climbing almost in stealth mode. The Dow is up 825 points in about five weeks but the gains haven’t come in the 100-point pops that were common during much of the market’s climb in the past 12 months. There have only been a few of those big days in recent weeks. Most of the increase has come from gains that don’t make headlines, like 45 points, or 10.
The gains could always unravel but it makes for a more sustainable climb when investors mostly nibble at stocks.
“Boring is the new sexy,” said Neil Menard, principal at Steben & Co. in Rockville, Md.
The advance is occurring in part because investors’ list of worries isn’t growing. There are still big problems like unemployment and government deficits, but they’re not new. And some worries are easing. Greece is taking steps to tackle its debt problems, for example. There had been fear its problems would spoil a global recovery.
The catalyst for this latest increase was the Fed’s decision Tuesday to hold its key lending rate at a record low of essentially zero. A government report that prices at the wholesale level fell by the biggest amount in seven months boosted investors’ belief that inflation is being contained.
On Wednesday, the Dow rose 47.69, or 0.5 percent, to 10,733.67. The Dow topped its earlier high for 2010 of 10,725.43 from Jan. 19. It is at its highest point since Oct. 1, 2008. The seven-day streak of gains is its longest since August.