Stocks gain for fifth day; builds on record highs
By STEVE ROTHWELL
The Associated Press | March 08,2013
Maureen Smaldone, a trader for Brendan E. Cryan and Company, monitors trading activity from her workstation at the New York Stock Exchange.
NEW YORK — The Dow pushed further into record territory Thursday, having surpassed its previous all-time high two days ago. The catalyst was the latest evidence that hiring is picking up.
Stocks started higher after the Labor Department reported that the number of Americans seeking unemployment aid fell by 7,000 last week, driving the four-week average to its lowest in five years. The drop is a positive sign ahead of Friday’s employment report.
The Dow Jones industrial average rose 33 points to 14,329 by the closing bell.
The Dow barreled through a record high Tuesday and has since added to its gains.
Investors have been buying stocks on optimism that employers are slowly starting to hire again and that the housing market is recovering. Growing company earnings are also encouraging investors to get into the market. The Dow is 9.3 percent higher this year and the broader S&P 500 is up 8.2 percent.
“If you have a multi-year time horizon, equities are an attractive asset, but don’t be surprised to see some volatility, especially after the big run we’ve had,” said Michael Sheldon, chief market strategist at RDM Financial Group.
Boeing led the Dow higher Wednesday, advancing $1.85 to $80.91 following reports that U.S. regulators were poised to approve a plan within days to allow the plane maker to begin test flights of its 787 Dreamliner. The 787 fleet has been grounded since Jan. 16 because of safety concerns about the plane’s batteries. Twenty one stocks in the 30-member index advanced.
The Federal Reserve will release the results of its annual stress test for banks after the market closes Thursday. Financial stocks advanced amid speculation that banks will have amassed enough capital to be able to return more cash to shareholders. Bank of America was the second biggest gainer in the Dow, rising 25 cents to $12.16, with JPMorgan Chase in third spot, gaining 46 cents to $50.54.
Any decline in stocks may be short-lived, as investors who have missed out on the rally since the start of the year jump into the market, says Jeffery Saut, chief investment strategist at Raymond James.
“The rally is going to go higher than most people think,” says Saut. “This thing has caught most money managers flat-footed.”
The stock market’s rally this year has been helped in no small part by continuing economic stimulus from the Federal Reserve.
The U.S. central bank began buying bonds in January 2009 and is still purchasing $85 billion each month in Treasury bonds and mortgage-backed securities.
That has kept interest rates near historic lows, reducing borrowing costs and encouraging investors to move money out of conservative investments like bonds and into stocks.
The Nasdaq composite advanced six points, 0.2 percent, to 3,228.
The yield on the 10-year Treasury note, which moves inversely to its price, rose to 1.99 percent from 1.94 percent.