Wednesday, March 12, 2014
The Associated Press
NEW YORK — The Dow Jones industrial average is back in record territory.
A board on the floor of the New York Stock Exchange shows Tuesday’s record-high closing number – 15,680.35 – for the Dow Jones industrial average.
The Associated Press
Investors drove the Dow to an all-time high Tuesday on expectations that the Federal Reserve will keep its economic stimulus program in place.
The Fed is in the middle of a two-day policy meeting at which it’s expected to maintain its $85 billion worth of monthly bond purchases. That program is aimed at stimulating economic growth by keeping borrowing costs at historic lows.
“The expectation that the Fed remains clearly on hold is the catalyst for this march higher,” said Quincy Krosby, a market strategist at Prudential Financial.
Stocks have surged to record levels this year as the Fed’s stimulus has helped corporations boost profits. Relatively low yields on bonds also have encouraged investors to buy stocks.
The Dow rose 111.42 points, or 0.7 percent, to 15,680.35. The index last climbed to a record Sept. 18 when the Fed surprised financial markets by announcing that it would continue it stimulus because the economy had yet to show strong enough growth.
Since then, the economy has endured a 16-day partial shutdown of the government that has hurt consumer confidence and likely crimped growth. For that reason, many analysts and economists are predicting that the Fed will continue its stimulus until early next year.
On Tuesday, the Dow also got a big boost from IBM. The technology company’s stock surged after it said it would buy $15 billion more of its own stock.
IBM gained $4.77, or 2.7 percent, to $181.12, accounting for about a quarter of the index’s gain.
The Standard & Poor’s 500 index also closed at a record, the 33rd time it has closed at an all-time high this year.
The index rose 9.84 points, or 0.6 percent, to 1,771.95. It is on track to log its best monthly performance of the year. It is up 5.4 percent so far in October.
Stocks have also been boosted this month as corporations report third-quarter earnings.
About half the companies in the S&P 500 have reported. So far, most are doing better than expected. Companies in the index are forecast to log growth of 4.5 percent, according to data from S&P Capital IQ.
The Nasdaq composite rose 12.21 points, or 0.3 percent, to 3,952.34.
The Nasdaq Stock Market was hit with another glitch. Nasdaq indexes weren’t updated from 11:53 a.m. to 12:37 p.m. because of a technical problem that was caused by human error, the exchange operator said in a statement. Trading of Nasdaq-listed stocks wasn’t affected.
Two economic reports came in relatively weak on Tuesday, which may have signaled to investors that the Fed will continue to delay any reduction of its bond buying.
Retail sales fell 0.1 percent in September, the weakest showing since March, as auto sales dipped. And Americans’ confidence in the economy fell this month to the lowest level since April. People were worried about the impact of the 16-day partial shutdown of the U.S. government.