Dow closes above 16,000 for first time
The Dow Jones Industrial Average closed above the psychological threshold of 16,000 for the first time on Thursday, extending a rally in which the gauge has added over 22 per cent this year.
The index rose 109.17 points (0.69 per cent) to a new closing high of 16,009.99.
The broad-based S&P 500 jumped 14.48 points (0.81 per cent) to 1,795.84, while the tech-rich Nasdaq Composite Index leapt 47.88 points (1.22 per cent) to 3,969.15.
Thursday’s rise comes on the heels of buoyant economic data, including a drop in weekly US jobless claims and data from the Markit analysis group that showed rising US manufacturing activity this month.
Analysts also cited the US Senate Banking Committee’s confirmation of Federal Reserve vice-chairman Janet Yellen to take over the central bank.
Yellen is seen by investors as unlikely to quickly scale back the Fed’s aggressive stimulus, which has helped fuel this year’s rally.
Other key factors in the market’s rise include the better US housing market, solid earnings and generally stronger economic data.
“There’s a bias towards the upside,” said David Levy, portfolio manager at Kenjol Capital Management. “When prices fall, there’s somebody stepping in to buy.”
The biggest gainer in the Dow was chipmaker Intel, which jumped 2.7 per cent after the company’s chief executive said the personal computer market was “beginning to see signs of stabilisation”.
Banking stocks performed well, including Dow component JPMorgan Chase (up 2 per cent), Bank of America (up 3 per cent) and Citigroup (up 1.9 per cent).
Tobacco firm Philip Morris sank 3 per cent after Goldman Sachs downgraded the company, citing a weaker earnings outlook.
Discount retailer Target fell 3.5 per cent after reporting a 46 per cent drop in earnings, due in part to heavy startup costs associated with its launch of more than two dozen Canadian stores during the quarter.
Bond prices rose. The yield on the 10-year US Treasury dipped to 2.78 per cent from 2.79 per cent on Wednesday, while the 30-year slipped to 3.88 per cent from 3.90 per cent. Bond prices and yields move inversely.