Dow reaches high point on investor cheer

NEW YORK REPORT

WALL Street stocks rose yesterday, driving the Dow to another record high, on optimism about the US economy, while US oil prices rebounded after disappointing Chinese industrial data spurred an initial drop.

The gain in equities curbed safe-haven demand for US government debt, driving US Treasury debt prices modestly lower. The rally in equities, along with optimism about the economic outlook after Friday’s surprisingly strong US jobs report, also dented the safe-haven appeal of gold, though the metal edged higher on the Chinese data.

The dollar clung to gains from Friday’s US jobs report, trading near a three and a half year high against the yen and a three-month peak versus the euro. The benchmark Standard & Poor’s 500 stock index extended its winning streak to seven sessions and touched its highest intraday level since 15 October, 2007.

Friday’s US jobs report, along with encouraging data on the housing market, reinforced the appetite for stocks and views that the market will post further gains with help from the Federal Reserve’s stimulus efforts.

Wall Street’s “fear gauge”, the VIX, fell to the lowest level since February 2007, closing 8.2 per cent lower at 11.56.

The resilience on Wall Street and a 0.53 per cent gain in Tokyo shares helped MSCI’s world equity index rise 0.39 per cent to 361.51, near its mid-2008 highs.

The Dow closed up 50.22 points, or 0.35 per cent, at 14,447.29. The S&P 500 finished up 5.04 points, or 0.32 per cent, at 1,556.22. The Nasdaq Composite Index ended up 8.51 points, or 0.26 per cent, at 3,252.87.

The Dow is up over 10 per cent for the year, while the S&P 500 is up more than nine per cent.