|Dow Jones industrial average back above 15,000||| Print ||
|Written by STEVE ROTHWELL, AP Markets Writer|
|Tuesday, 07 May 2013 13:23|
NEW YORK (AP) — The U.S. stock market joined a global rally Tuesday, and the Dow Jones industrial average continued to flirt with the 15,000 mark.
Wall Street followed Japanese and European markets higher. Those indexes rose in response to good news about central bank stimulus and the German economy.
In the U.S., the market got a lift after satellite TV company DirecTV and watchmaker Fossil reported higher quarterly profits.
The Dow and broader Standard & Poor's 500 index are trading at record levels, driven by optimism that the U.S. economy is continuing to recover and as the Federal Reserve maintains its stimulus program.
The Dow punched through 15,000 Friday after the U.S. government reported a sharp pickup in hiring last month. The index is 14.6 percent higher this year.
"We don't think people are giving enough credit to the strength of the economy," said Ryan Detrick, a senior technical strategist at Schaeffer's Investment Research. "We still like the market."
More than 80 percent of companies in the S&P 500 index have reported first-quarter earnings, and profits are at a record level.
Of companies that have reported, almost 70 percent have beaten the expectations of Wall Street analysts for income, according to S&P Capital IQ data. Those analysts expect earnings to rise 5 percent for the first quarter and to keep on climbing throughout the year.
Fossil, a maker of watches and handbags, was among companies reporting earnings Tuesday. The stock leapt $8.24, or 8.3 percent, to $107.20 after the company said its earnings rose 24 percent on higher sales. DirecTV, the country's largest provider of satellite TV services, rose $3.27, or 5.6 percent, to $61.31 after its earnings beat expectations of financial analysts. The company's saw subscriber growth in the U.S. and Latin America.
The Dow was up 45 points at 15,013, as of 11:28 a.m. Eastern Daylight Time, an increase of 0.1 percent. It edged back above 15,000 shortly after the opening bell. The Dow first crossed above 15,000 on Friday.
Other global markets also rose.
Japanese stocks surged, pushing the Nikkei up 3.6 percent to 14,180.24 on its first day of trading following the Golden Week holiday. The index is trading above 14,000 for the first time in nearly five years. The Nikkei has jumped 36 percent this year after the Bank of Japan announced a new aggressive monetary policy to get the country out of its two-decade stagnation.
In Europe, Germany's DAX touched a record of 8,195 after surprisingly strong industrial orders, before giving up some of its gain. The index was up 62 points, or 0.8 percent, at 8,174 in late trading in Germany.
Schaeffer's Detrick said he was particularly encouraged by the resurgence in smaller stocks, which suggested a broad recovery beyond larger companies. The Russell 2000 index of small companies has gained 13.2 percent this year.
The Standard & Poor's 500 index gained four points to 1,621, or 0.07 percent. The Nasdaq composite edged down two points to 3,391, a loss of 0.04 percent.
In government bond trading, the yield on the 10-year U.S. Treasury note climbed to 1.79 percent from 1.76 percent Monday. The yield has risen this week after going as low as 1.63 percent last week, its lowest level of the year. The rising yield means demand is slipping for low-risk U.S. government debt as traders shift money into riskier assets like stocks.
The price of crude oil fell 71 cents to $95.47 a barrel in New York, and the price of gold was down $22.80 or 1.6 percent, to $1,445. The dollar was lower against euro and the Japanese yen.
Copyright 2013 The Associated Press.