NEW YORK
The Dow Jones industrial average has reclaimed 10,000 for the first time in a year.
The Dow crossed five figures in afternoon trading Wednesday, seven months after it hit a 12-year low of 6,547.05 on March 9. The comeback by the stock market's best-known indicator is the most visible sign yet that investors believe the economy is indeed recovering from the financial crisis and recession.
Cheering erupted from traders on the floor of the New York Stock Exchange as stocks briefly moved above the psychological barrier. They fell back into the 9,990 range in the normal ebb and flow of trading.
Upbeat earnings reports from chip maker Intel Corp. and banker JPMorgan Chase & Co. Wednesday gave the Dow its final push past 10,000. The average has slipped back several points since crossing the milestone, but that's part of the normal ebb and flow of trading.
Investors are increasingly shaking off lingering doubts about the economy. However, analysts still warn that problems like rising unemployment and a weak housing market pose a threat to a solid recovery.
The Dow is now up 53 percent from its March low.
JPMorgan Chase, the first major bank to report third-quarter earnings, stoked the market's optimism as it easily beat Wall Street's expectations, reporting a profit of $3.59 billion for the July-September period. The bank also achieved record year-to-date revenue.
Investors didn't seem fazed that JPMorgan, considered one of the strongest financial institutions throughout the financial crisis, doubled the amount of money it set aside during the quarter to cover failed home and credit card loans.
"Better-than-expected is a win," said Peter Schwartz, principal at Gregory J. Schwartz & Co. "People's expectations have been calibrated to buffer some of the bad news."
Intel also beat analysts' estimates, reporting a smaller-than-expected decline in profit and sales after the market closed Tuesday. The leading chip maker said it expects sales in the final period of the year to top projections, raising hopes that the computer market is improving.
Together, the reports quieted fears that major U.S. companies won't be able to boost profits through sales growth and not just massive cost-cutting, which was a main driver behind the improvement in second-quarter results.
A smaller-than-expected decline in retail sales last month also encouraged buyers, as did another rally in commodities prices. Gold hit a new record of $1,072 an ounce, while oil rose above $75 a barrel for the first time in a year. Treasury prices and the dollar fell as investors abandoned safe-haven assets.
The Dow rose 117.07, or 1.2 percent, to 9,988.13 after trading as high as 10,001.58. The Standard & Poor's 500 index rose 14.07, or 1.3 percent, to 1,087.26, and the Nasdaq composite index rose 25.12, or 1.2 percent, to 2,165.01.
Three stocks rose for every one that fell on the New York Stock Exchange, where 328 stocks hit new 52-week highs and only two hit new lows. Volume on the NYSE came to 660.1 million shares, compared with 562 million at the same time on Tuesday.
Email
Facebook
Google
Twitter
Favorites
More
Advertisement