Dow Crosses 12,000
The New York Times reports:
Stocks on Wall Street broke through a psychologically significant level on Wednesday that markets have not seen for two and a half years.
The Dow Jones industrial average crossed 12, 000 points on Wednesday, fueled by President Obama’s call for a lower corporate tax rate and higher-than-expected new home sales in December.
The last time the index closed above that level was on June 19, 2008, and the S.& P. last closed above 1,300 on June 25 of the same year.
In late morning trading, the Dow was back below 12,000, gaining 16.20 points, or 0.14 percent, to 11,993.39. The Standard & Poor’s 500-stock index was up 5.32 points, or 0.41 percent. The Nasdaq rose 18.52 points, or 0.68 percent.
During his State of the Union address, the president asked lawmakers to work with him to close corporate tax loopholes and use the additional revenue to lower corporate tax rates.
And the Commerce Department reported Wednesday that sales of new homes rose 17.5 percent in December from November to a seasonally adjusted annual rate of 329,000 units. Still, sales for all of 2010 were down 14.4 percent from 2009, agency said.
Shares of Toll Brothers, the home builder, rose 2.3 percent on the new home sales. The home improvement retailer Home Depot rose 1.4 percent while rival Loews was flat.
Stanley A. Nabi, chief strategist for the Silvercrest Asset Management Group, said markets have seen a trend of strong corporate performance of late.
“Corporate balance sheets in the United States, particularly non-financial balance sheets, are in superb condition,” Mr. Nabi said. In his more than 50 years in the business, he said: “I have not seen balance sheets as full of cash and liquidity as right now.”
Shares of the Boeing Company dropped 3.5 percent after the company said its fourth-quarter profit fell 8 percent from the period a year ago.
United Continental Holdings, the merged airline, rose 4.5 percent after the carrier reported a fourth-quarter profit that beat analysts’ estimates after travel increased and fares rose.
And the Xerox Corporation fell 8.1 percent after it said that its fourth-quarter net income dipped 5 percent from a year ago, largely because of the cost of restructuring.
Shares in Europe were higher. The FTSE in London was 1.4 percent higher. In Frankfurt, the DAX rose 1.2 percent, and the CAC 40 in Paris gained 1 percent.
When the Dow first crossed the 12,000 threshold, in October 2006, unemployment was under 5 percent and the economy was growing at 2 to 3 percent a year. Today, unemployment hovers near 10 percent and the economy has struggled to grow.
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