Wall St surges to five-year highs; Dow tops 14,000
NEW YORK, Feb 2 — US stocks rose to five-year highs yesterday, with the Dow closing above 14,000 for the first time since October 2007, after jobs and manufacturing data showed the economy’s recovery remains on track.
The S&P touched its highest since December 2007 after a 5 per cent gain in January, which was its best start to a year since 1997. The index is now just about 60 points away from its all-time intraday high of 1,576.09.
Employment grew modestly in January, with 157,000 jobs added. That was slightly below expectations, but Labor Department revisions showed 127,000 more jobs were created in November and December than previously reported.
Analysts attributed the market’s robust showing so far this year partly to a deluge of cash flowing into equities.
Investors poured US$12.7 billion into US-based stock mutual funds and exchange-traded funds in the latest week, concluding the strongest four-week flows into stock funds since 1996, data showed on Thursday.
“There is a lot of money looking for a home, and people are finally deciding the bond market is done and moving money into equities,” said Edward Simmons, managing director and partner at HighTower in Portland, Maine.
“I see the rotation (of assets) pushing the market up in the face of not-massive amounts of good news,” he said. “People are overlooking the higher risk in equities.”
Other reports released yesterday showed the pace of growth in the US manufacturing sector picked up in January to its highest level in nine months, US consumer sentiment rose more than expected last month, while December construction spending also beat forecasts.
“All the data seems to keep pointing to a slowly, steadily improving economy,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.
The Dow Jones industrial average was up 149.21 points, or 1.08 per cent, at 14,009.79. The Standard & Poor’s 500 Index was up 15.06 points, or 1.01 per cent, at 1,513.17. The Nasdaq Composite Index was up 36.97 points, or 1.18 per cent, at 3,179.10.
With the day’s gains, major equity indexes rose five straight weeks.
More than 600 stocks on the NYSE and the Nasdaq combined hit 52-week highs yesterday, including Google which rose as high as US$776.60 (RM2,330), before closing at US$775.60, up 2.6 per cent.
Investors were also attuned to corporate earnings, with a trio of Dow components reporting profits that beat expectations.
Exxon Mobil ended flat at US$90.04 after reporting results while Chevron added 1.2 per cent to US$116.50.
Drugmaker Merck & Co fell 3.3 per cent to US$41.83 after a cautious 2013 outlook.
Generic drugmaker Perrigo reported a better-than-expected second-quarter profit and its shares jumped 4.7 per cent to US$105.28.
Of the 252 companies in the S&P 500 that have reported earnings so far, 69 per cent have exceeded expectations, according to Thomson Reuters data. That is a higher proportion than over the past four quarters and above average since 1994.
Overall, S&P 500 fourth-quarter earnings are estimated to have grown 4.4 per cent, according to the data, up from a 1.9 per cent forecast at the start of the earnings season but well below a 9.9 per cent profit growth forecast on Oct. 1.
Dell Inc gained 2.9 per cent to US$13.63 after sources said the company was nearing an agreement to sell itself to a buyout consortium led by its founder, Michael Dell, and private equity firm Silver Lake Partners. — Reuters