Stocks Rally For Record Close
Wall Street resumed its fourth-quarter rally Thursday, pushing the Dow Jones industrials to their first close above 12,400 after a series of strong company earnings and a drop in unemployment claims revived investors' confidence in the economy.
The market, which stalled earlier this week on interest rate and economic concerns, was reinvigorated by robust quarterly profits from Bear Stearns Cos., Lehman Brothers Holdings Inc., and Costco Wholesale Corp., as well as healthy outlooks from Citigroup Inc. and Honeywell International.
Wall Street was also boosted by the Labor Department's report that the number of Americans filing for unemployment benefits plunged for a second straight week. The data suggested the U.S. economy won't cool as quickly as some investors feared.
"As far as I can tell, consumers keep spending as long as unemployment is low," said Ed Peters, chief investment officer at PanAgora Asset Management Inc.
Airline stocks were pummeled by rising oil prices after the Organization of Petroleum Exporting Countries said it is keeping its oil production target stable for now, but making cuts in February. Overall, though, the stock market was unfazed by the possibility of higher fuel prices dampening consumer spending and hiking companies' materials costs.
According to preliminary figures, the Dow rose 99.02, or 0.80 percent, to a new closing record of 12,416.52, after hitting a new trading high of 12,431.26 earlier in the session. The Dow's last record close of 12,342.56 was reached on Nov. 17.
Broader stock indicators also rose sharply. The Standard & Poor's 500 index was up 12.28, or 0.87 percent, at 1,425.49, after reaching a six-year trading high of 1,427.23. The technology-laden Nasdaq composite index rose 21.44, or 0.88 percent, to 2,453.85.
Bond prices fell again Thursday, with the yield on the benchmark 10-year Treasury note rising to 4.59 percent from 4.58 percent late Wednesday. The dollar rose against other major currencies, and gold prices rose as well.
Oil prices shot higher after the OPEC announcement. Crude oil for January soared $1.13 to $62.50 a barrel on the New York Mercantile Exchange.