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Dow rocks past 12,000
Strong earnings news, tame inflation, surprising housing numbers push the blue-chip average to a landmark.
October 18 2006: 10:19 AM EDT
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NEW YORK (CNNMoney.com) -- The Dow Jones industrials jumped past the 12,000 mark for the first time in history Wednesday as a tame reading on inflation, surprisingly solid housing numbers and strong earnings pushed stocks higher.
The 30-share Dow (up 70.60 to 12,020.62, Charts) climbed about 0.5 percent about 45 minutes into the session, pushing the world's most widely watched stock market gauge into record territory.
The broader S&P 500 (up 5.28 to 1,369.33, Charts) index rose 0.3 percent while the tech-fueled Nasdaq composite (up 6.24 to 2,351.19, Charts) gained around 0.1 percent.
Stocks have been rallying as investors bet that the economy, which is slowing, won't tip into recession, and that corporate earnings will keep growing. Worries about the slowdown in housing have also lessened.
"Housing is not collapsing and inflation is not accelerating," Pierre Ellis, an economist at Decision economics, told Reuters. "The data were reassuring on both fronts for the Fed."
Before the market opened the government said that the Consumer Price Index, a key inflation reading, fell an unexpectedly steep 0.5 percent in September while a separate report showed housing strength. Analysts had predicted a fall of 0.3 percent for overall CPI.
The relatively tame inflation reading eased concerns from Tuesday, when a measure of wholesale prices rose much faster than estimated and renewed concerns that the Federal Reserve might start raising interest rates again. The central bank has held rates steady at its last two meetings after two years of rate hikes.
Meanwhile, the pace of home building unexpectedly strengthened in September as new housing starts rose 5.9 percent. But new building permits fell to a near five-year low.
Earnings news was also strong.
J.P. Morgan Chase (down $0.80 to $47.19, Charts), the nation's No. 3 financial services company and a Dow component, continued the trend of strong earnings as it reported better-than-expected results before the bell Wednesday.
After the bell Tuesday, No. 1 chipmaker Intel (up $0.43 to $21.33, Charts) reported lower earnings that nonetheless beat estimates, as the company said it is winning back lost market share. Intel shares rose 3 percent Wednesday.
Computer maker IBM (up $4.25 to $91.20, Charts) also beat forecasts on improved earnings. IBM shares were upgraded by Goldman Sachs to a "buy" recommendation from neutral early Wednesday. IBM shares jumped over 5 percent Wednesday.
Internet firm Yahoo (down $0.36 to $23.79, Charts) reported disappointing results, but shares didn't suffer too much. Yahoo CEO told investors during a conference call late Tuesday call that its long-awaited new search technology was now live.
But shares of cell phone maker Motorola (down $1.28 to $23.57, Charts) fell nearly 4 percent after the cell phone maker posted disappointing results after the bell Tuesday.
Treasury bonds edged higher on the economic news, pushing the yield on the 10-year note down to 4.76 percent from 4.77 percent late Tuesday. Bond prices and yields move in opposite directions.
The dollar fell against the yen and little changed against the euro.
Oil prices edged lower ahead of the government's weekly report on fuel inventories. U.S. light crude fell 21 cents to $58.72 a barrel on the New York Mercantile Exchange.
Stocks in Asia closed mostly higher while stocks in Europe rose.
Strong earnings news, tame inflation, surprising housing numbers push the blue-chip average to a landmark.
October 18 2006: 10:19 AM EDT
<!--startclickprintexclude-->
<!-- CONTENT --><!--endclickprintexclude-->
NEW YORK (CNNMoney.com) -- The Dow Jones industrials jumped past the 12,000 mark for the first time in history Wednesday as a tame reading on inflation, surprisingly solid housing numbers and strong earnings pushed stocks higher.
The 30-share Dow (up 70.60 to 12,020.62, Charts) climbed about 0.5 percent about 45 minutes into the session, pushing the world's most widely watched stock market gauge into record territory.
The broader S&P 500 (up 5.28 to 1,369.33, Charts) index rose 0.3 percent while the tech-fueled Nasdaq composite (up 6.24 to 2,351.19, Charts) gained around 0.1 percent.
Stocks have been rallying as investors bet that the economy, which is slowing, won't tip into recession, and that corporate earnings will keep growing. Worries about the slowdown in housing have also lessened.
"Housing is not collapsing and inflation is not accelerating," Pierre Ellis, an economist at Decision economics, told Reuters. "The data were reassuring on both fronts for the Fed."
Before the market opened the government said that the Consumer Price Index, a key inflation reading, fell an unexpectedly steep 0.5 percent in September while a separate report showed housing strength. Analysts had predicted a fall of 0.3 percent for overall CPI.
The relatively tame inflation reading eased concerns from Tuesday, when a measure of wholesale prices rose much faster than estimated and renewed concerns that the Federal Reserve might start raising interest rates again. The central bank has held rates steady at its last two meetings after two years of rate hikes.
Meanwhile, the pace of home building unexpectedly strengthened in September as new housing starts rose 5.9 percent. But new building permits fell to a near five-year low.
Earnings news was also strong.
J.P. Morgan Chase (down $0.80 to $47.19, Charts), the nation's No. 3 financial services company and a Dow component, continued the trend of strong earnings as it reported better-than-expected results before the bell Wednesday.
After the bell Tuesday, No. 1 chipmaker Intel (up $0.43 to $21.33, Charts) reported lower earnings that nonetheless beat estimates, as the company said it is winning back lost market share. Intel shares rose 3 percent Wednesday.
Computer maker IBM (up $4.25 to $91.20, Charts) also beat forecasts on improved earnings. IBM shares were upgraded by Goldman Sachs to a "buy" recommendation from neutral early Wednesday. IBM shares jumped over 5 percent Wednesday.
Internet firm Yahoo (down $0.36 to $23.79, Charts) reported disappointing results, but shares didn't suffer too much. Yahoo CEO told investors during a conference call late Tuesday call that its long-awaited new search technology was now live.
But shares of cell phone maker Motorola (down $1.28 to $23.57, Charts) fell nearly 4 percent after the cell phone maker posted disappointing results after the bell Tuesday.
Treasury bonds edged higher on the economic news, pushing the yield on the 10-year note down to 4.76 percent from 4.77 percent late Tuesday. Bond prices and yields move in opposite directions.
The dollar fell against the yen and little changed against the euro.
Oil prices edged lower ahead of the government's weekly report on fuel inventories. U.S. light crude fell 21 cents to $58.72 a barrel on the New York Mercantile Exchange.
Stocks in Asia closed mostly higher while stocks in Europe rose.
