Streaking Dow closes above 16,000 for 1st time
NEW YORK — The Dow Jones industrial average finished above 16,000 for the first time on Thursday as the blue-chip index races toward its best performance in a decade.
The Dow has been on fire lately, propelled higher by a combination of solid corporate earnings, a steadily strengthening economy and easy-money policies from the Federal Reserve.
Since the start of the year, the Dow is up 22 percent. It has topped three 1,000-point milestones in 10 months. It eclipsed 14,000 in February and 15,000 in May. If it holds onto its gains, it would notch its strongest performance since 2003.
“The market has come a long way,” said Dan Seiver, an economist at San Diego State University. “It's a sign of just how far financial markets have recovered.”
The Dow has more than tripled since its bear market low in March 2009.
Back then, the country was in the worst downturn since the Great Depression, the housing market had collapsed and individual investors had abandoned stocks.
Now, with the economy recovering and confidence returning, small investors are coming back in.
“People are getting out of bonds into stocks,” said Steven Ricchiuto, chief economist at Mizuho Securities. “We're in the early stages of a recovery.”
The Dow rose 109.17 points, or 0.7 percent, to close at 16,009.99 Thursday. The Standard & Poor's 500 index rose 14.48 points, or 0.8 percent, to 1,795.85. The Nasdaq composite rose 47.88 points, or 1.2 percent, to 3,969.15.
In a sign that investors are taking on more risk, small-company stocks rose at a much faster pace than the rest of the market. The Russell 2000 index jumped 19.83 points, or 1.8 percent, to 1,119.62.
The Labor Department reported before the market opened that applications for unemployment benefits dropped last week to the lowest level since September. The number of applications is close to where it was before the Great Recession.
General Motors rose after the federal government said it expects to sell its remaining stake in the company by the end of the year. The Treasury Department got shares after bailing out GM five years ago, but once it sells, the automaker will be free of restrictions on executive pay that were imposed with the bailout. It also would be free to pay dividends if it chooses.
GM gained 43 cents, or 1.1 percent, to $38.12 on Thursday. The stock is up 32 percent this year.
“Having the Treasury out is probably something that is going to be positive for the shares,” said Jeff Morris, head of U.S. equities at Standard Life Investments. “Some investors are probably a bit spooked by having a meaningful amount of government ownership.”
Johnson Controls was among the biggest gainers in the S&P 500. The company, which makes heating and ventilation systems for buildings, said its board approved a $3 billion increase in its share-buyback program. The company rose $2.13, or 4.4 percent, to $50.35.
In government bond trading, the yield on the 10-year note edged down to 2.79 percent from 2.80 percent on Wednesday. The yield, which is a benchmark used to set interest rates on many kinds of loans, including home mortgages, is the highest it's been since Sept. 17.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Harmar developer sells 15 hotels in Western Pa., West Virginia
- Rice Energy spin-off priced below expected range
- Wesco cautious, reaffirms guidance
- Insurers give customers extra time to pay first month’s premium for 2015 under Obamacare
- Federated Investors forecasts optimistic scenario for growth in economy, markets
- Fed emphasizes patient approach on rate increases
- Consumer prices drop aside gas cost plunge
- Stock market jumps as Fed pledges patience in rate hikes
- Natural gas groups says increase in Pennsylvania taxes would bring dire results for economy
- FedEx 2Q profit jumps 23%; revenue up 8% at Moon-based Ground business
- 84 Lumber vice president McCrobie says company, housing market rebounding