Wednesday, April 16, 2014
TThe stock market marched back into record territory Tuesday as investors seized on the latest encouraging news about the economy. This time, it was a report on the health of small businesses.
Small business owners were slightly more optimistic in April, according to a survey released by the National Federation of Independent Business before the stock market opened. That helped push the Russell 2000, an index of small-company stocks, up 1.3 percent, ahead of other major indexes.
"Small businesses are in many ways the backbone of the economy ... to see that index move up was a positive surprise," said Quincy Krosby, market strategist for Prudential Financial. "Overall, the market wants to move higher and it's hard to fight that."
The Russell index is 16.1 percent higher since the start of the year, and is up more than the Standard & Poor's 500 index, which includes larger, global companies. Small stocks are doing well partly because they are more focused on the U.S., which is recovering, and don't get as much revenue from recession-plagued Europe as larger companies do.
The advance in small-company stocks is another sign of how optimistic investors have become. Smaller stocks are more risky than large ones, but also offer investors the prospect of greater returns in a rising market.
Another closely watched stock market indicator has also been on a tear: transportation stocks. The Dow Jones transportation average rose 1.9 percent Tuesday and is up 21.8 percent this year, far more than other major indexes. Investors often see these stocks as an indicator of where the economy is headed. When companies make and ship more goods, the thinking goes, truckers, airlines and railways do more business.
The market rose from the opening of trading and climbed steadily throughout the day.
It got support early after hedge fund manager David Tepper said that he is still bullish on stocks. Speaking on CNBC before the market opened, Tepper said that investors shouldn't worry about the Fed tapering its stimulus program. The money manager has about $18 billion dollars under management, according to the broadcaster.
The Dow Jones industrial average rose 123.57 points, or 0.8 percent, to 15,215.25. The S&P 500 index rose 16.57 points, or 1 percent, to 1,650.34. Both closed at all-time highs after stalling on Monday.
Boeing delivers more 787s as grounding ends
Boeing restarted deliveries of 787s on Tuesday after a four-month halt while it dealt with the smoldering batteries that had kept the planes grounded.
Boeing delivered the plane to Japan's All Nippon Airways at its factory in Everett, Wash.
Airline flights and deliveries were halted in mid-January after two battery incidents. One was a fire on a plane that had just landed minutes earlier, and the second was in-flight smoldering that prompted an emergency landing by an ANA plane.
The emergencies prompted aviation authorities to ground the world's 50 787s while investigators looked for a root cause. They never found one, but Boeing designed extensive changes to the battery and its charger and U.S. and Japanese authorities approved the fix last month.
Airlines have been slowly resuming flights. Ethiopian Airlines was the first to get the plane back in the air, on April 27.
Boeing had set a goal of delivering at least 60 of the planes this year, and it said on Tuesday that it is still on track to meet that target.
--From news service reports