Dow closes above 13,000 milestone
THE DOW closed above 13,000 for the first time since May 2008 yesterday and the Standard & Poor’s 500 also hit a milestone, as buoyant US consumer confidence data and a sharp drop in oil prices nudged the nearly five-month rally forward.
The S&P 500 closed above 1,370, its May 2011 intraday high, a move that could invite momentum buying as money managers chase performance, though low volumes lately have raised concerns about the rally’s longevity.
“I don’t see anything technically favouring a downturn right now,” said Chris Burba, short-term market technician at S&P in New York.
“No doubt (the market) has been overbought since the beginning of February, but in a powerful uptrend, price will continue higher for some time amid overbought conditions.”
Technology shares ranked among the best performers, and the Nasdaq was trading at its highest since 2000. Micron Technology shot up 3.7 per cent to $8.88 after Intel said it will sell its stake in two wafer factories to Micron and buy chips from the company.
Intel advanced 1.3 per cent to $27.24. The PHLX semiconductor index rose 1.6 per cent.
The Dow Jones industrial average gained 23.61 points, or 0.18 per cent, to close at 13,005.12. The S&P 500 Index rose 4.59 points, or 0.34 per cent, to end at 1,372.18. The Nasdaq Composite Index climbed 20.60 points, or 0.69 per cent, to finish at 2,986.76.
The S&P 500 is up about nine per cent since the start of the year, largely because of data showing stronger momentum in the economy and signs of progress in managing the Eurozone’s debt crisis.
Low volumes overshadowed the gains, however. With just one trading day left in February, daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.89bn shares. In February 2011, the daily average volume was 7.81bn.
Yesterday’s volume was about 6.4bn shares on the NYSE, NYSE Amex and Nasdaq.
Consumer confidence in the world’s largest economy jumped to a one-year high in February, according to a report from The Conference Board, a private business research group. Consumer spending accounts for more than two-thirds of US economic activity.
The drop in oil prices from recent highs also relieved worries about the outlook for consumer spending. Brent crude oil futures fell more than $2 to settle at $121.55 a barrel.