Dow closes at another record

Associated Press

Trader Christopher Forbes, left, and James Denaro work on the floor of the New York Stock Exchange on Wednesday. Stocks rose in early trading, sending major indexes back to record highs, as traders anticipated that the Federal Reserve will keep up its stimulus program for some time.

NEW YORK — There weren’t any major economic developments or blockbuster earnings. But that didn’t stop investors from pushing the Dow Jones industrial average to another record Wednesday.

Instead, investors focused on the big economic news yet to come this week — third-quarter U.S. economic growth on Thursday and the October jobs report Friday. Both reports could signal how much longer the Federal Reserve will continue its $85 billion a month in bond purchases. That program has held down interest rates, kept bond yields low and made stocks more attractive for investors.

The Dow notched its 33rd record close for the year, rising to 15,746.88 with some help from Microsoft, which rose after analysts at Nomura said investors should focus on how the company’s fortunes could improve once it picks a replacement for CEO Steve Ballmer.

Other indexes also gained, but not as much.

The Standard & Poor’s 500 index also went up, but not quite enough to set another record. The Nasdaq composite and the Russell 2000, an index of small-company stocks, edged lower. The patchy performance of the overall market suggests that investors may be getting wary of stocks after this year’s strong gains, said Sam Stovall, chief equity strategist at S&P Capital IQ.

Stovall said he did not think the market’s advance was in danger of being derailed, but said “investors are still a little bit nervous.”

The Dow climbed 128.66 points, or 0.8 percent. The S&P 500 index rose 7.52, or 0.4 percent, to 1,770.49, just one point below its all-time high set Oct. 29. It’s up 24 percent so far this year.

The Nasdaq composite fell 7.92 points, or 0.2 percent, to 3,931.95. The index reached a 13-year high at the end of last month.

The Dow record came a day before one of Wall Street’s most anticipated events of 2013, Twitter’s initial public offering. The stock was expected to debut on the New York Stock Exchange under the symbol “TWTR.”

If this week’s growth and employment reports offer weak signals on the economy, they could foretell a longer period of Fed stimulus.

Economists expect that the U.S. economy grew at an annualized pace of 2 percent in the July-to-September period, down from 2.5 percent the previous quarter, according to FactSet, a financial data provider. They also forecast that U.S. employers added 122,000 jobs in October, down from 148,000 the month before.

In other news Wednesday, Ralph Lauren was among the biggest gainers in the S&P 500.

The luxury retailer rose $9.33, or 5.5 percent, to $180.52 after raising its sales forecast for the year in anticipation of a strong holiday season. Ralph Lauren also increased its quarterly dividend by 12.5 percent to 45 cents.

Tesla Motors was among the biggest decliners in the Nasdaq. The electric carmaker’s stock sank $25.65, or 14.5 percent, to $151.16 after it reported a loss. Analysts had been expecting a profit. The stock is still up almost 350 percent this year after the company turned a profit and won raves for its Model S sedan, which starts at $70,000.

The drop in Tesla’s stock was so steep that it triggered a “circuit breaker” on the Nasdaq exchange.

The rule, introduced by the Securities and Exchange Commission to prevent big stock declines from snowballing, puts restrictions on short-selling a stock that has dropped 10 percent or more from the previous day’s closing price. When traders sell stocks short, they borrow the stock and immediately sell it in the hope of being able to buy the shares back later at a lower price.

In government bond trading, the yield on the 10-year note fell Tuesday to 2.65 percent from 2.67 percent. The Treasury said Wednesday it will begin selling Treasury securities next year that have variable interest rates. It’s the first new Treasury security in 17 years.

Among other stocks making big moves, Abercrombie & Fitch fell $5.18, or 13.5 percent, to $33.13. The teen clothing retailer cut its full-year profit forecast and reported a sharp drop in sales for the third quarter.

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JERRY ARIPEZ's picture

Amazing to see how the Bush Era in contrast to the Era of today

I hate to relive those days of the market at less than 8000, when pension funds and investors were living under a Republican Presidency and having to adjust to Bush's caused recession of tax cuts for the rich and two lied into wars.

The market is an indicator of the economy and safeguard for investors for the US growth and GDP being the telltale of actual steady growth looking back to past years.

The moving average shows that the market and the GDP has recovered to steady incline for the US.

JERRY ARIPEZ's picture

Adding to todays news on the GDP

U.S. Third-Quarter GDP Rose 2.8%
The U.S. economy posted higher-than-expected growth in the third quarter.

Gross domestic product, the broadest measure of goods and services produced across the economy, grew at an annual rate of 2.8% in the July-through-September period, the Commerce Department said Thursday. That followed 2.5% growth in the second quarter and marked the fastest rate of growth in a year. Economists had expected third-quarter growth to clock in at 2%, according to a Dow Jones survey.

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