New stock market milestone: Dow 15,000

Published on NewsOK Modified: May 7, 2013 at 6:04 pm •  Published: May 7, 2013
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NEW YORK (AP) — The Dow Jones industrial average punched through another milestone Tuesday, closing above 15,000 for the first time just two months after recovering the last of its losses from the 2008 financial crisis.

Good economic reports, strong corporate earnings and fresh support from central banks helped ease investor concerns about another economic slowdown. Many had been on the lookout for signs that a spring swoon would derail the rally, as happened in each of the past three years.

Instead, the Dow continued its epic ascent of 2013, which has seen it climb 1,952 points — almost 15 percent — since Jan. 1.

"The thing that's been driving stocks is rising confidence," said James Paulsen, chief investment strategist at Wells Capital Management. "Economic growth, job creation and the housing market have been better than expected."

The Dow closed at 15,056.20, up 87.31 points, or 0.6 percent. The Standard & Poor's 500 index added 8.46 points to a record 1,625.96, a gain of 0.5 percent. It has jumped 199 points this year, or 14 percent.

The record close extends the stock market's comeback from the depths of the financial crisis. Both indexes reached all-time highs earlier this year, then kept rising, largely driven by optimism that the U.S. economy will keep gaining strength.

"We don't think people are giving enough credit to the strength of the economy," said Ryan Detrick, a senior technical strategist at Schaeffer's Investment Research. "We still like the market."

Detrick said he was particularly encouraged by the resurgence in smaller stocks, which suggested a broad recovery beyond larger companies. The Russell 2000 index gained eight points to close at 967.82. It has risen 14 percent this year.

The S&P has climbed higher for six straight months — the longest stretch of gains since a seven-month run that started in March 2009, when the market hit a financial crisis low, and ended in October 2009.

All 10 industries in the S&P 500 have joined in the rally. Health-care companies have led the way, up 19 percent.

The Dow, S&P 500 and Russell 2000 index of small companies are all at record highs. The sole exception is the tech-heavy Nasdaq, which remains far below the peaks it scaled in the dot-com bubble.

Six years have passed since the Dow closed above 14,000 for the first time.

Tuesday's gains piled up with the growing realization among investors that the traditional threats to a rising market — higher interest rates, falling profits, a possible recession — are unlikely to appear anytime soon. What's more, with interest rates near record lows, investors see few other places to put their money.

In a round of interviews on Monday, investor Warren Buffett said the stock market looked "reasonably priced" even after its surge. But, Buffett added, people pay too much attention to markets reaching highs. They ought to pay attention when markets hit new lows.