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Pre-crisis flashback: Dow briefly hits 13,000

It hasn't been that high since May 2008, a reflection of the strengthening U.S. economy and a stabilizing Europe.

The Associated Press

NEW YORK — It came and went in a flash each time, a number on a board for mere seconds, but its symbolic power couldn't be dismissed.

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A trader works on the floor Tuesday at the New York Stock Exchange. The Dow rose above 13,000 for brief periods at three points Tuesday, but couldn’t hold its gains.

The Associated Press

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The Dow Jones industrial average, powered higher all year by optimism that the economic recovery is finally for real, crossed 13,000 on Tuesday for the first time since May 2008.

The last time the Dow was there, unemployment was 5.4 percent and Lehman Brothers was a solvent investment bank..

The milestone Tuesday came about two hours into the trading day. The Dow was above 13,000 for about 30 seconds, and for slightly longer at about noon and 1:30 p.m., but couldn't hold its gains. It finished up 15.82 points at 12,965.69.

Still, Wall Street took note.

It was just last summer that the Dow unburdened itself of 2,000 points in three terrifying weeks. Standard & Poor's downgraded the United States' credit rating, Washington was fighting over the federal borrowing limit, and the European debt crisis was raging.

A second recession in the United States was a real fear. But the economy grew faster every quarter last year, and gains in the job market have been impressive, including 243,000 jobs added in January alone.

"Essentially over the last couple of months you've taken the two biggest fears off the table, that Europe is going to melt down and that we're going to have another recession here," said Scott Brown, chief economist for Raymond James.

The tumult of last summer and fall left the Dow as low as 10,655. It closed Tuesday 22 percent above that low. The Dow is 1,199 points from an all-time high, just a 9 percent rally away.

A long-awaited bailout to help Greece prevent a potentially catastrophic default, announced before dawn in Europe after 12 hours of talks, helped the Dow clear 13,000.

U.S. investors also were cheered by earnings from Home Depot, watched closely as a barometer of American spending on homes, and Macy's. Wal-Mart missed Wall Street expectations, and its stock lost 4 percent, worst among the 30 stocks in the Dow.

The index has climbed steadily this year. It has gained 6 percent and has not lost 100 points on any day. But even though the Greek debt crisis may be receding, high gasoline prices are emerging as a threat to the economic recovery, and thus the stock market.