New York – The bull market toppled another milestone Thursday: The Dow Jones industrial average closed above 14,000 for the first time.
Shaking off another increase in oil prices and more downbeat assessments of the subprime-mortgage mess, the blue-chip Dow rose 82.19 points, or 0.6 percent, to 14,000.41, bringing its year-to-date gain to 12.3 percent.
Broader indexes also rallied. The technology-dominated Nasdaq composite gained 20.55 points, or 0.8 percent, to 2,720.04, its highest close since 2001.
The Dow’s close topped the previous record of 13,971.55 set Tuesday and marked the index’s 32nd record close of the year.
Tech stocks were a big factor in the market’s rally Thursday: IBM jumped $4.78 to $115.86, a 5 1/2-year high, after the computer giant late Wednesday said second-quarter earnings rose 12 percent, beating expectations.
Strong earnings reports lifted a broad mix of stocks Thursday, including computer-network company Juniper Networks, up $3.33 to $30.06; paint producer Sherwin-Williams, up $5.98 to $72.99; and temporary-help company Labor Ready, up $4.84 to $27.79.
After regular trading ended, however, Google reported second-quarter earnings that fell short of analysts’ consensus estimate. The Internet giant’s shares plunged to $510 in after-hours trading after closing at $548.59.
Still, generally healthy quarterly profit results this week have been reinforcing the basic message of market optimists: Despite high oil prices, the subprime debacle and other challenges, the U.S. economy is strong enough to keep corporate earnings overall moving up.
Jeffrey Dunham, principal at Dunham & Associates in San Diego, said that if earnings remain robust and interest rates eventually come down, investors could look past some of their concerns and send the stock market higher.
“We don’t have another ’99 occurring here,” he said, referring to the stock-market run-up in 1999 that preceded the dot-com collapse. “Things haven’t reached stupid levels.”
Al Goldman, market analyst at brokerage A.G. Edwards in St. Louis, said many investors’ view of the housing market’s woes is “We’ve got a big problem in one segment of the economy, but it’s going to go away” eventually.
Marc Pado, U.S. market strategist at Cantor Fitzgerald, said investors continue to believe that subprime-mortgage defaults won’t be significant enough to seriously hurt the broader economy. While brokerage and many other financial-services stocks are suffering because of the housing sector’s downturn, investors still are willing to bet on other sectors, he said.
