Dow Finishes Shy of 12,000
NEW YORK (TheStreet) - Stocks finished modestly higher Wednesday, after the Dow Jones Industrial Average rose past the 12,000 mark for the first time since June 2008 during intra-day action on the back of better-than-expected home sales.
The Dow finished 8 points, or 0.07% higher, at 11,985. During the session, the benchmark index flitted above and below the 12,000 mark several times, swinging from a low of 11,961 to a high of 12,020. The blue-chip index, which is up 3.5% so far in 2011, has now risen in three of the past four sessions, and is on track to record a ninth straight weekly gain.
The S&P 500 inched closer to its own psychological milestone of 1,300, finishing up 5 points, or 0.4%, at 1297 and the Nasdaq Composite tacked on 20 points, or 0.7%, to close at 2739.
The Federal Reserve Open Market Committee voted unanimously Wednesday afternoon to leave rates unchanged and continue its $600 billion bond buying program. The central bank said that the economy continues to recover but at a pace insufficient to make a dent on unemployment. It also acknowledged rising commodity prices but said underlying inflation has been on a downtrend. John Canally of LPL Financial said he was surprised the vote was unanimous. Charles Plosser of Philadelphia and Richard Fisher of Dallas, two of the new voting members on the board, were expected to be potential naysayers, as they had previously expressed concerns about "QE2." "No dissent is being taken by the market as a doveish signal. It also reinforces our view that the market is wrong about when the Fed will start to raise rates," said Canally, noting the rise in bond yields following the release of the policy statement. "We think it will happen only 18 months from now." The dollar index was down by 0.1%. The benchmark 10-year Treasury sold off further by 25/32, lifting the yield to 3.426%. . Breadth among the Dow components turned negative in the final hour of trading, with only 14 stocks finishing higher while 16 declined. DuPont (DD), Verizon (VZ) and Alcoa (AA) were among the Dow's top performers. Shares of Boeing (BA) came under pressure, capping gains on the Dow. The company met profit estimates with adjusted fourth-quarter earnings of $1.11 a share but issued 2011 earnings guidance of $3.80 to $4 a share, short of the $4.55 a share that analysts had forecast. The stock was down 3% at $70.02. Procter & Gamble (PG) and Walt Disney (DIS) were other laggards. Overall, 67% of stocks on the New York Stock Exchange advanced while 30% lost ground.
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