NEW YORK (AP) – The Dow Jones industrial average may have pierced its 2000 record, but Wall Street couldn’t be further from its turn-of-the century stock hysteria.

“If we do break this number, then what?” said Jay Suskind, head trader at Ryan Beck & Co. “It’s not like we’re off to the races. It’s just a number.”

In early trading Thursday, the Dow rose to 11,724.86, briefly breaking though its record close of 11,722.98 before retreating. The Dow closed 29.21 points higher, or 0.25 percent, at 11,718.45. It has yet to reach its all-time trading high of 11,750.28, also set Jan. 14, 2000.

Any resemblance to Thursday’s close to the go-go years is purely a coincidence, Suskind said. “Everybody is trying to hark back to the days, and it’s just not there.”

Just being near its highs may have propelled the Dow above them, said Jon Brorson, head of growth equities at Neuberger Berman in Chicago.

“Professional traders love targets. When you ever have a target out there, they will be drawn to it like a moth to a bug zapper. They will run the market up and see if they can hit that target.”

What the Dow’s flirtation with its record could signal is that investors believe better times are ahead. If they believed many economists’ predictions that the downturn in the housing market will push the economy into recession, they wouldn’t be buying stocks now at all.

“This is a big vote of confidence by investors that the outlook for this year and going into next year is looking good,” said Edward Yardeni, market analyst, at Oak Associates. “Seeing confidence push the Dow up to record highs beats the alternatives.”

But it would be an even bigger vote of confidence if the Standard & Poor’s 500 were anywhere near its own highs. Instead, it is about 12.5 percent beneath those highs.

The broader Standard & Poor’s 500 and Nasdaq composite indexes are far off their all-time highs, although their records were reached around the same time.

The S&P, which gained 2.56, or 0.19 percent, to close at 1,339.15, is still about 188 points below its closing high of 1,527.46, but is at a 5 1/2-year high. The Nasdaq, which rose 6.63, or 0.29 percent, to 2,270.02, is not expected to approach its high close of 5,048.62 any time soon.

The last time the Dow stood at these levels, Wall Street was driven by wide-eyed investors eager for a slice of the wealth being generated by the dot-com and housing booms. Traders grabbed any stocks that looked remotely promising, catapulting the major indexes sharply higher.

But after early 2000, the market began to crumble, slowly at first as doubts about the high-tech boom set in. Signs of recession accelerated the decline, and then the Sept. 11, 2001, terror attacks and their aftermath, including earnings declines and losses in many industries, sent stocks plunging.

It didn’t stop there – corporate scandals including the collapse of Enron Corp. and WorldCom Inc. also shook Wall Street. The combination of all these factors devastated stocks, sending the Dow to a five-year closing low of 7,286.27 on Oct. 9, 2002, nearly 38 percent off its record high close.

Wall Street made its way back slowly, with investors behaving more cautiously and limiting their exposure to risk as they slowly regained faith in stocks. What has also helped is more than four years of sturdy corporate profit growth despite the threat that energy prices and interest rates would hurt consumer spending and companies’ bottom lines.

In Thursday’s trading, the rest of the market held few surprises. Bonds fell, with the yield on the 10-year Treasury note at 4.62 percent, up from 4.59 percent Thursday. The dollar rose against other major currencies. Gold prices also rose.

Crude oil futures fell. A barrel of light crude settled at $62.76, down 20 cents, on the New York Mercantile Exchange.

In corporate news, General Motors Corp. rose 78 cents to $33.06 after dissident shareholder Kirk Kerkorian told GM he is interested in buying up to 12 million more shares of the company as he presses the automaker to enter a three-way alliance with Renault and Nissan.

Hewlett-Packard Co., which is drawing scrutiny from Congress over a corporate spying probe, rose 58 cents to $35.97 after the company announced the resignation of general counsel Ann Baskins.

American Greetings Corp., the nation’s second-largest greeting cards maker, fell $2.21 to $22.83 after swinging to a loss in the second quarter from a year-ago profit, due in part to new marketing and operational initiatives.

Advancing issues led decliners 8 to 7 on the New York Stock Exchange, where consolidated volume was 2.36 billion shares, down from 2.76 billion Wednesday.

The Russell 2000 index of smaller companies fell 0.30, or 0.04 percent, to 732.24.

Overseas, Japan’s Nikkei stock average rose 0.48 percent. Britain’s FTSE 100 rose 0.69 percent, Germany’s DAX index slipped 0.01 percent, and France’s CAC-40 gained 0.13 percent.

The Dow’s record comes during two years of waxing and waning on Wall Street.

“Having the Dow break through a record may be a hollow victory in the end,” Battipaglia said. “It wouldn’t surprise me if it pulls back from here.”

AP-ES-09-28-06 1808EDT


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