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Dow Jones hits record high!

Old 10-03-2006, 04:29 PM
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Default Dow Jones hits record high!

Dow Jones Industrial Average Surges to New All-Time High, Closes at Record

Tuesday , October 03, 2006 (Fox News)

NEW YORK — Wall Street notched a historic day on Tuesday as the Dow Jones industrial average surged to a new all-time intraday high and ended the session at its highest close ever. Investors were buoyed by falling oil prices, which continued their recent swoon and ended below $59.

The Dow rushed past its all-time trading high of 11,750.28 into uncharted territory, rising as high as 11,754.55 shortly after 12:30 p.m.; it surpassed the milestone after briefly passing its record high close of 11.722.98 on Thursday and Monday. Both records were set on Jan. 14, 2000, before the stock market began a precipitous decline caused by the dot-com bust and recession and worsened by the aftermath of terrorism and corporate scandals.

Later in the day the index of 30 blue chip stocks faded from record levels on a report that Intel (INTC) could face legal action from the European Union in an antitrust case. Nevertheless, the index held onto enough of the day's gains to finish in record territory at 11,727.34, up 56.99 points.

While investors welcomed the Dow's latest achievement, it comes at a time the stock market is more conservative, even more muted, than the Wall Street of early 2000. Then, investors were still piling exuberantly into high-tech stocks. In 2006, the market's gains come only after investors' careful parsing of economic data and corporate earnings reports.

Tuesday's advance came on the second straight day that oil prices fell sharply, helping to calm fears about inflation and possible interest rate increases. But the market as a whole has been choppy, with traditionally defensive sectors such as pharmaceuticals and utilities leading the market higher since its May and June decline, said Doug Johnston, head of U.S. trading at Adams Harkness in Boston.

"I think we break out to the all-time high, then we could get a blow-off correction off of that," Johnston said.

The Dow, whose well-known large-cap stocks include aluminum producer Alcoa Inc. (AA), discount retailer Wal-Mart Stores Inc. (WMT) and the Walt Disney Co. (DIS), has recovered ahead of the broader Standard & Poor's 500 and the Nasdaq composite index, which also peaked in early 2000. Those indexes were inflated — overinflated in the case of the Nasdaq — by the dot-com bubble.

The S&P 500's high close was 1,527.46, and the index remains more than 12 percent away from that milestone. The Nasdaq is even farther off its highs and no one expects it to eclipse its record of 5,048.62 any time soon.

To reach new highs, the Dow had to recover not only from the high-tech collapse, but also recession and the effects of the Sept. 11, 2001, terror attacks. The stock market was further shaken by corporate scandals at companies including Enron Corp. and WorldCom Inc., and the Dow sank to a five-year closing low of 7,286.27 on Oct. 9, 2002, nearly 38 percent off its record high close.

The market's recovery was helped by more than four years of solid corporate profit growth, and more recently, the Federal Reserve's decision to halt its more than two-year string of interest rate hikes.

The broader stock indicators were also higher. The S&P 500 index was up 2.79, or 0.21 percent, at 1,334.11, and the Nasdaq rose 6.05, or 0.27 percent, to 2,243.65.

http://www.foxnews.com/story/0,2933,217361,00.html
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