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April 3, 2013

Dow hits new high on trader optimism

The Associated Press

The Dow Jones industrial average closed at a record high Tuesday after reports on auto sales and factory orders provided the latest evidence that the U.S. economy is strengthening. Traders plowed money back into European stocks as the financial situation in Cyprus appeared to stabilize.

Health insurers powered the gains a day after the government released revised reimbursement rates for Medicare Advantage plans. The new numbers suggest that funding cuts will be less severe than analysts and companies had feared.

The Dow closed up 89.16 points, or 0.6 percent, at 14,662.01.

The Dow broke through an all-time record on March 5. It has risen steadily since then, routinely setting new trading highs.

The Standard & Poor's 500 index rose 8.08 points, or 0.5 percent, to 1,570.25. It rose to within two points of its trading high of 1,576 reached on Oct. 11, 2007.

European markets closed sharply higher on the first trading day after a tense, four-day holiday weekend. Paris' CAC-40 rose 2 percent, London's FTSE 100 1.2 percent and Frankfurt's DAX 1.9 percent.

The gains in Europe markets boosted confidence among U.S. investors. While European markets were closed for four days for the Easter holiday, many traders feared that Cyprus' precarious financial situation would worsen. But no bad news materialized. Instead, Cyprus' international lenders agreed to extend until 2018 its deadline for meeting key budget targets.





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