Dow touches 13,000 but loses its grip later
News of Greek bailout, earnings bolster market
NEW YORK – The Dow Jones industrial average crossed 13,000 on Tuesday for the first time since May 2008, when the Lehman Brothers investment bank was solvent, unemployment a healthy 5.4 percent and the worst of the Great Recession months ahead.
The milestone came about two hours into the trading day. The stock market got the final push from strong corporate earnings reports and a Greek bailout deal intended to prevent the next financial crisis.
The average was above 13,000 for about 30 seconds before dropping back. It reclaimed the mark just after 9 a.m. Pacific time and again just after 10:30 PST, then lost all its gains for the day.
Just before noon, the Dow was down 20 points at 12,929. The Standard & Poor’s 500, a broader measure of the market, was down two points at 1,359. The Nasdaq composite index was down 16 at 2,935.
Just last summer, the Dow unburdened itself of 2,000 points in three terrifying weeks. S&P downgraded the United States credit rating, Washington was fighting over the federal borrowing limit, and the European debt crisis was raging.
A second recession in the United States was a real fear. But the economy grew faster every quarter last year, and gains in the job market have been impressive, including 243,000 jobs added in January alone.
“Essentially over the last couple of months you’ve taken the two biggest fears off the table, that Europe is going to melt down and that we’re going to have another recession here,” said Scott Brown, chief economist for Raymond James.
The 13,000 level is a psychological milepost, but in a market built on perception, it could influence more cautious investors to pump more money back into the stock market, analysts said.
“You need notches along the way to measure things, and that’s as good as any,” said John Manley, chief equity strategist for Wells Fargo’s funds group. “Is 50 older than 49 and a half? Yes, by six months. Do those six months really make a difference? Probably not. But it does give us a fixed point, something we can look at.”
Dan McMahon, director of equity trading at Raymond James, called the 13,000 marker a “positive catalyst, and that’s what we need to get us through the next range.” In the end, he said, it’s just “a big round number.”