DOW Near Highest Level Since 2008 Financial Crisis
The Dow Jones industrial average was trading near its highest close since the 2008 financial crisis today (Jan. 26) after solid news on factory orders and strong earnings from U.S. manufacturers highlighted the economy's growing momentum, The Associated Press reported.
Broader market indexes edged lower, though they have surged this year, too. Traders appear less afraid of spillover damage from the European debt crisis, and data on jobs and manufacturing have been consistently strong.
"With global risk off center stage and attention going back to the fundamentals, this market was ready to explode, which is exactly what it is doing," said Doug Cote, chief market strategist with ING Investment Management.
Before the market opened, the government reported that unemployment claims rose only modestly last week after a steep decline the week before. The long-term trend still indicates an improving job market.
Orders to factories for long-lasting manufactured goods increased in December for the second straight month, and a key measure of business investment rose solidly.
That strong demand was apparent in quarterly earnings reports from U.S. manufacturers. 3M stock rose 1.1 percent after its fourth-quarter profit beat Wall Street's estimates.
Caterpillar, the world's biggest heavy equipment maker, soared 2.5 percent, the most of the 30 companies in the Dow, after beating analysts' estimates last quarter. It said it expects to do the same this year, as global demand remains high.
The Dow Jones industrial average was up 27 points, or 0.2 percent, at 12,783 just after 11 a.m. EST. 3M, Caterpillar and Kraft Foods led the gains.
The Dow is within reach of its 2011 high of 12,810, reached in April. The last time it closed higher than that was on May 20, 2008, when it settled at 12,826. The Dow is up nearly 5 percent so far this year. The S&P 500 and Nasdaq have gained even more.
The Dow would need to rise another 11 percent to get to its record high close of 14,164, reached on Oct. 9, 2007.
The Standard & Poor's 500 index fell three points to 1,323. It was dragged lower by volatile financial companies and telecommunications firms. The Nasdaq composite index shed six points to 2,812.
AT&T fell 2.4 percent, by far the most of the 30 companies in the Dow, after its earnings missed Wall Street's forecasts. The company remains heavily dependent on the Apple iPhone, which it pays to subsidize, but recently lost its exclusive rights to sell the phone in the U.S.
Stocks had their highest close in eight months Wednesday after the Federal Reserve said it plans to keep interest rates extremely low until late 2014 to encourage lending and investment and support the economic recovery.