Dow Jones sets new record of 11,948
The Dow Jones industrial average climbed 95.57 points, or 0.81 per cent, to a record close of 11,947.70.india Updated: Oct 13, 2006 13:54 IST
US stocks rallied on Thursday, as several consumer-oriented companies, including McDonald's Corp, reported earnings that topped estimates, nudging the Dow industrials to a record high.
Warehouse club Costco Wholesale Corp and motorcycle maker Harley-Davidson Inc also announced forecast-beating profits.
"Everyone's big concern has been that the economy has been riding on the back of the consumer and that high gas prices would get them to stop spending, but at least we know that they are still going to McDonald's and Costco," said Eric Kuby, chief investment officer at North Star Investment Management Co in Chicago. "And it hasn't just been the cheap goods. You had Harley with good earnings and that's an expensive discretionary item."
The Dow Jones industrial average climbed 95.57 points, or 0.81 per cent, to a record close of 11,947.70. The Dow also hit an intra-day record high at 11,959.63 and is up more than 10 percent from its low of the year in mid-July.
The Standard & Poor's 500 Index gained 12.88 points, or 0.95 per cent, to close at 1,362.83. The benchmark index touched a new 5 1/2-year high of 1,363.76 during the session.
The Nasdaq Composite Index rose 37.91 points, or 1.64 percent, to close at 2,346.18. The Nasdaq is now only about 29 points within reach of its 2006 high of 2,375.54, set on April 20.
Techs gain as oil drops
The Nasdaq's outperformance has been helped by lower oil prices, prompting traders to shift their allocations to beaten-down tech shares, according to David Straus, a portfolio manager with Johnston Lemon Inc in Washington.
"Remember that tech stocks got washed out in June and July and that was an incredibly unloved sector. Now if you look at earnings going forward, they look pretty good on a price-to-earnings basis," Straus said.
Also helping the Nasdaq was Costco, the heaviest-weighted gainer in the index. Costco's stock rose 7.7 per cent, or $3.83, to $53.90 after the company said fourth-quarter profit rose, beating its lowered forecast.