NEW YORK REPORT
THE Dow Jones Industrial Average soared to a record closing high yesterday, breaking through levels last seen in 2007 and as investors rushed in to join the party in anticipation of more gains.
Signs of a strengthening US economy, continued support from the Federal Reserve, and fairly attractive valuations compared to other assets have boosted the Dow by almost nine per cent so far this year.
A strong reading in the US services sector, which accounts for the bulk of economic activity, was the latest indicator of improving demand.
About 71 per cent of the NYSE stocks closed higher while 67 per cent of Nasdaq-listed shares ended in positive territory.
The blue-chip Dow’s forward 12-month price-to-earnings ratio was at 15.87, compared with 16.99 during the 2007 highs.
Among Dow stocks hitting all-time highs yesterday were Walt Disney and 3M. All 10 of the S&P 500’s industrial sector indexes rose, with tech shares among the day’s gainers. Just two components ended lower – Coca-Cola and Merck, while Alcoa ended flat.
The Dow Jones Industrial Average shot up 125.95 points, or 0.89 per cent, to 14,253.77 at the close. The Standard & Poor’s 500 Index gained 14.59 points, or 0.96 per cent, to 1,539.79. The Nasdaq Composite Index climbed 42.10 points, or 1.32 per cent, to 3,224.13.
Qualcomm rose two per cent to $67.97 after the world’s leading supplier of chips for cellphones said it was raising its quarterly cash dividend by 40 per cent. BMC Software rose 3.7 per cent to $42.32 and Micron Tech added 3.9 per cent to $8.73.