Dow ends at highest level in four years
THE Dow closed at its highest level in more than four years yesterday after US manufacturing expanded at a faster pace than expected in April, easing jitters about a slowdown in the economic recovery.
The Dow Jones industrial average gained 65.69 points, or 0.50 per cent, to 13,279.32 at the close. The Standard & Poor’s 500 Index rose 7.91 points, or 0.57 per cent, to 1,405.82. The Nasdaq Composite Index added 4.08 points, or 0.13 per cent, to 3,050.44.
The Dow now sits at levels not seen since December 2007. The gains leave the benchmark S&P 500 within about 16 points of a high reached in May 2008. A convincing break above that level could set the market up for more gains, traders said.
But the Nasdaq sold off sharply into the close on weakness in Apple and BlackBerry maker Research in Motion in a sign the market could struggle to make further headway in the short-term.
However, shares of Intel, long touted by many investors as undervalued, hit a 52-week high at $29.05 and closed up two per cent at $28.95.
Financial, transportation and energy shares, all of which are linked to economic growth, were strong performers. The S&P financial sector index rose 1.1 per cent, helped by a 2.5 per cent gain in Bank of America, which closed at $8.31. Chesapeake Energy rose 6.3 per cent ahead of the natural gas producer’s earnings after the bell.
Yesterday’s move higher, which came in a relatively quiet market with European exchanges closed for May Day holidays, drove the S&P 500 within striking distance of its recent high at 1,422.38.
Of the 321 S&P 500 companies that have reported quarterly results so far, 71.3 per cent have topped analysts’ estimates
BP’s profit dropped on a fall in production prompted by the sale of oil fields to pay for the Gulf of Mexico disaster. US-listed shares of BP fell 1.6 per cent.
Huntsman jumped 8.9 per cent after profit nearly tripled on higher prices for its chemicals.
Healthcare stocks rose, boosted by Molina Healthcare, which advanced 3.5 per cent after the company’s earnings topped estimates. The Morgan Stanley healthcare payor index gained 1.7 per cent.
PF Chang’s China Bistro surged nearly 30 per cent after the restaurant chain agreed to be bought by a private equity firm.
Volume was 6.64bn shares on the New York Stock Exchange, the Nasdaq and the NYSE Amex, below the daily average this year of 6.76bn. Advancers outpaced decliners by a ratio of about two to one on the NYSE. But on the Nasdaq decliners just outstripped advancers.