Dow rise sets fresh high despite report
The Dow pushed to fresh highs on Wednesday one day after notching an all-time record, even as the Federal Reserve said economic growth continued at a dull pace.
The Dow Jones Industrial Average rose 42.47 points (0.30 per cent) to 14,296.24, a new all-time high.
The broad-based S&P 500 edged up 1.67 (0.11 per cent) to 1541.46, while the tech-rich Nasdaq Composite Index declined 1.77 (0.05 per cent) to 3222.37.
The market gains came despite a mixed report on US economic conditions from the Federal Reserve.
Although the Fed’s Beige Book showed “modest to moderate” economic expansion, it noted concerns about the impact of new tax hikes on consumer spending.
Michael James, managing director of equity trading at Wedbush Morgan Securities, said many investors continued to have doubts given the uncertainty in Europe and high unemployment in the US. But momentum was pushing stocks higher.
“The market resilience and the index going higher are pulling people into the market that don’t want to be buying,” James said. “People are forced to be buying chasing the performance.”
Among Dow components, the biggest gainers included Bank of America (up 3.2 per cent), Alcoa (up 2.6 per cent) and Cisco Systems (up 2.3 per cent).
Hewlett-Packard, also a Dow component, rose 2.8 per cent on reports of fresh shareholder pressure to revamp the computer maker’s board and possibly top management.
Another Dow member, Exxon Mobil, dropped 0.1 per cent after signalling 2013 production would drop one per cent from the 2012 level.
Staples increased its quarterly dividend, but sank 7.2 per cent after reporting quarterly revenues and full-year 2013 earnings guidance that missed expectations.
American Eagle Outfitters plummeted 10.1 per cent after signalling that first-quarter earnings would be lower than last year’s levels. The company cited “macroeconomic headwinds and unfavourable weather” as drags on consumer spending.
Bond prices fell. The yield on the 10-year Treasury rose to 1.94 per cent from 1.89 per cent late on Tuesday, while the yield on the 30-year roe to 3.15 per cent from 3.10 per cent. Bond prices and yields move inversely.
Published on: Thursday, March 07, 2013blog comments powered by Disqus
Today on Switzer
Did the Victorian Treasurer's health benefit levy contribute to Tatts Group's 19% fall in net profit after tax? Tatts Group CEO Robbie Cooke joins Switzer TV to discuss this and much more. (Broadcast Monday 1 September 2014.)
As we move forward, unemployment around the world will continue to rise and global GDP will continue to fall. We have been writing about this until we are blue in the face, so here is some more.
Note to markets ignoring the Ukraine crisis. When mad, bad Vlad – President Putin – reminds everyone Russia is a major nuclear power it is very scary stuff.
Let’s look at this decision to kill the mining tax while delaying the lift in compulsory super for five years, so it freezes at 9.5 per cent.
While market demand in a booming Sydney has eased slightly in winter, I am expecting a very strong spring season with more stock likely to ramp up activity over the next three months.
Ah the first day of spring; time of warmth, hope and renewal. Pity then that the world is going to hell in a handbasket.