The stock market has been surprisingly buoyant so far this year. Massive liquidity thanks to Fed monetary stimulus coupled with virtually no yield anywhere has coaxed money into riskier assets. The Dow has not dropped more than 1% in any trading day in 2012. The complacency in the market is higher than seen in quite some time which is bearish. I still expect an unnerving decline before June you may want to use this rally to get defensive.-Lou
Dow Closes Above 13K for First Time Since ’08
A strong report on U.S. consumer confidence gave the blue-chip index the boost it needed to close beyond the 13000 mark for the first time since May 2008, a level achieved before the financial crisis roiled Wall Street and incited one of the worst downturns in recent memory.
The Dow Jones Industrial Average climbed 23.6 points, or 0.18%, to 13005, the S&P 500 rose 4.6 points, or 0.34%, to 1372 and Nasdaq Composite gained 20.6 points, or 0.69%, to 2987.
The Dow hit a 12-year closing low of 6547 in March 2009 and has rebounded 98.6% since then. The average sits only 8.2% away from the record high it hit in October two years earlier.
Looking at broader markets, the S&P 500 also closed at its highest level since June 2008, while the Nasdaq is sitting at its highest value since December 2000.
Technology companies posted the biggest gains on the day by a wide margin. Indeed, heavyweight Apple (AAPL: 535.41, +9.65, +1.84%) notched a new all-time high on speculation it may unveil its newest iPad at a special media event late next week. Other strong performers included health-care companies, consumer staples, basic material and financial shares.
Traders Cheer Consumer Confidence Data, Shrug Off Goods Report
The Conference Board said its index of consumer attitudes increased to 70.8 in February from a revised 61.5 the month prior, zipping past estimates of a reading of 63. The reading was the highest since February 2011, while the “jobs hard to get” component came in at its lowest level since November 2008.
There were worries among economists that sentiment may have taken a hit as gasoline prices started to rise, but those fears have yet to come to fruition in the data.
Orders for long-lasting goods slid 4% in January on a month-to-month basis, the biggest fall in three years, the Commerce Department reported. Economists expected a much shallower drop of 1%. The drop may have been partially attributable to “the tendency for orders to decline in the first month of a quarter and rebound in later months, as companies firm up order books as the strength of demand becomes clearer,” economists at Barclays Capital wrote in a note to clients following the report.