Dow Jones has second-best close ever
Wall Street surged higher Tuesday, carrying the Dow Jones industrials to their second-best close ever as positive economic data further...
The Associated Press
NEW YORK — Wall Street surged higher Tuesday, carrying the Dow Jones industrials to their second-best close ever as positive economic data further buoyed a growing sense of optimism among investors.
The Dow gained 93.58 to 11,669.39. The Dow closed 53 points away from its record high close, within range of its high of 11,722.98 set in January 2000.
Microsoft, one of the 30 Dow stocks, rose 25 cents to close at $27.20 a share. Boeing, also a Dow stock, gained $1.29 to $79.
Broader stock indicators also jumped sharply. The Standard & Poor's 500 index rose to a 5 ½-year high, gaining 9.97 to 1,336.34 and the Nasdaq composite index rose 12.27 to 2,261.34.
Stocks, particularly the blue chips, rose after the Conference Board said its consumer confidence index for September rose more than expected, reaching 104.5 from a revised reading of 100.2 in August. Analysts forecast the index would rise to 103.
Also bolstering investor enthusiasm was a report from the Federal Reserve Bank of Richmond that showed the region's economy strengthened this month. The bank's manufacturing index came in at 9 versus 3 in August.
Jack Albin, chief investment officer with Harris Private Bank, said the market's advance reflects widespread investor enthusiasm and a realization that the Federal Reserve might have room to ease short-term interest rates. He pointed to low inflation and the recent nearly 20 percent pullback in oil prices.
"The Fed has a lot more elbow room to lower rates," he said. "The Fed could maybe even lower this year."
Light crude oil settled down 44 cents at $61.01 on the New York Mercantile Exchange. The slide in oil prices this month has given Wall Street investors optimism that consumer spending will hold up even as the economy slows and therefore help protect corporate profits.
Investor sentiment has strengthened since the Fed's August decision to leave interest rates unchanged after a two-year string of 17 straight increases. That enthusiasm became more widespread after the central bank held off again last week, signaling to investors that inflation remained within reasonable limits.
Recent reports on the health of the economy appeared to ease concerns held by some that the Fed had overreached in its bid to corral inflation.
Alfred E. Goldman, chief market strategist at A.G. Edwards & Sons Inc., doesn't expect the market's gains will last, however.
"I don't think we're going to go up, up and away from here," he said. "I think you've got momentum and the magnetism of a new record high for the Dow.
"I would preach a little caution here."