Dow hurtles past 12,500 mark
Wall Street surged Wednesday, hurtling the Dow Jones industrials past 12,500 for the first time as year-end bargain hunters picked up stocks across a variety of sectors.
The auto industry was in focus after a meeting between Toyota and Ford executives sparked hope for an alliance between the rivals on hybrid vehicle technology. Shares of both companies moved higher.
Further takeover activity lent support to the overall market after McClatchy announced late Tuesday that it had agreed to sell the Star Tribune newspaper in Minneapolis to a private equity fund. Also, graphic-communication company Cenveo agreed to buy rival Cadmus Communications.
But investors looking to buff up their portfolios by year’s end were behind most of the gains after major indexes fell last week.
“What you’re seeing is window dressing. People want to finish up the year looking like they own the best names,” said Philip S. Dow, head of equity strategy at RBC Dain Rauscher. “And for those that missed the market, they’re trying to put their cash to work and play catch-up.”
The session was again marked by thin volume typical of the week between Christmas and New Year’s Day. The New York Stock Exchange began the session with two minutes of silence in tribute to the late President Gerald R. Ford, while the Nasdaq Stock Market had a similar observance later in the morning.
The Dow rose 102.94 points, or 0.8%, to a closing record of 12,510.57. The index had gained 64 points Tuesday.
Broader stock indicators also advanced. The Standard & Poor’s 500 was up 9.94 points, or 0.7%, at 1,426.84, and the Nasdaq composite rose 17.71 points, or 0.7%, to 2,431.22.
The Russell 2,000 small-stock index and the NYSE composite joined the Dow at record highs.
Almost all U.S. indexes now are showing double-digit gains for the year. The Dow is up 16.7%, the Nasdaq has risen 10.2% and the S&P; 500 is up 14.3%.
A Commerce Department report that showed new-home sales rose more than expected in November spurred bond yields higher. A stronger housing market makes it less likely that the Federal Reserve will lower interest rates next year to support the economy.
The benchmark 10-year Treasury note rose to 4.65%, from 4.60% on Tuesday.
Oil prices continued to fall, continuing a drop of more than $1 on Tuesday on concerns that mild winter weather is depressing demand for heating fuel. The price of a barrel of light sweet crude fell 76 cents to $60.34 in New York.
In other market highlights:
* The S&P; home builders gauge added 1.9% for its best performance in three weeks after the report on new-home sales. Ryland Group had a good day, gaining $1.82, or 3.5%, to $54.35. Pulte Homes, the biggest U.S. builder by market value, advanced 50 cents to $33.35. KB Home of Los Angeles rose 97 cents to $51.76.
* Home-related businesses saw gains. Home Depot added 50 cents to $39.56. Paint maker Sherwin-Williams rose $1.81 to $64.37. Its 2.9% advance was the fourth-steepest in the S&P; 500.
“Housing is a major risk that consumers were facing and a risk that investors were concerned about,” said Charles Stamey, who helps manage $14 billion at Manning & Napier Advisors in Rochester, N.Y. “Any announcement that shows we might be near the bottom of that is going to be viewed as very positive.”
* Ford rose 9 cents to $7.58 on speculation that the company is interested in Toyota’s hybrid vehicle technology. The company’s Chief Executive Alan Mulally met with Toyota Chairman Fujio Cho, the two companies said. Toyota jumped $2.65 to $134.26.
GM, the world’s largest automaker, added 82 cents, or 2.8%, to $30.59 for the best gain in the Dow. Lower energy prices may stimulate demand for cars.
* Shares of the biggest U.S. retail chains were higher despite a report from the International Council of Shopping Centers confirming that sales were not as strong as hoped in the pre-Christmas holiday shopping period. There is speculation among analysts that retailers can make up for this as customers pack stores for year-end sales.
Wal-Mart Stores, the world’s largest retailer, rose 5 cents to $46.16. Federated Department Stores rose 58 cents to $38.34, while Target was up 38 cents at $57.47.
* McClatchy, the nation’s second-largest newspaper publisher, said it would sell the Star Tribune to Avista Capital Partners for $530 million. The sale follows McClatchy’s $4.5-billion purchase of the Knight Ridder newspaper chain.
Shares of McClatchy fell a penny to $43.06.
* Cadmus Communications rose $3.48, or 16.6%, to $24.46 after it agreed to be acquired by Cenveo for about $235 million. The two will form the third-largest graphic services provider in North America. Cenveo rose $1.85, or 9.3%, to $21.70.
