Dow closes at highest level of year, nears record

Published on NewsOK Modified: February 12, 2013 at 4:19 pm •  Published: February 12, 2013
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Investors may have become too optimistic about the outlook for stocks, said Uri Landesman, president of hedge fund Platinum Partners.

"The market is priced for perfection," said Landesman. "The odds of a disappointment are very, very high."

Landesman predicts that the S&P 500 will climb past its record and rise as high as 1,600 by April before then slumping as low as 1,300 as company earnings start to disappoint investors. The record close for the S&P 500 is 1,565, reached in October 2007.

Investors appear to be supporting the market by stepping in to buy stocks when prices dip, said JJ Kinahan, chief derivatives strategist at TDAmeritrade. The S&P 500 has gained for six straight weeks since the start of the year.

Confidence in the outlook for global growth has strengthened among asset managers in recent months, according to a Bank of America Merrill Lynch survey. The poll found that 59 percent of investors believe that the global economy will strengthen in the year ahead, in line with the reading in January. The outlook for growth had improved in the four previous months.

Investors will be watching closely Tuesday night when President Barack Obama delivers his annual State of the Union speech. Obama is expected to focus on the economy, including job creation.

A decline in bond prices since the beginning of the year has also slowed. The yield on the 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 1.98 percent. The yield was 1.71 percent at the beginning of the year.

In other trading Tuesday, the Nasdaq composite was down 5.51 points at 3,186.49.

Among other stocks making big moves:

— Coca-Cola, the world's largest beverage company, fell $1.05, or 2.7 percent, to $37.56 after reporting fourth-quarter revenue that fell short of analysts' forecasts.

— Masco jumped $2.22, or 13 percent, to $20.01 after the home improvement and building products company reported earnings that beat analysts' expectations thanks to strong demand in North America.

— Dun & Bradstreet, a provider of credit and business data, fell $6.60, or 7.7 percent, to $78.68 after the company reported that a fourth-quarter profit that came in below market expectations.