Dow sets new records on investor confidence

2013-03-05 21:14:13 GMT2013-03-06 05:14:13(Beijing Time)  Xinhua English

U.S. stocks surged on Tuesday, with the Dow Jones Industrial Average setting all-time closing high and intra-day high, as investors became more confident in the stock market.

The blue-chip Dow climbed 125.95 points, or 0.89 percent, to close for the first time above 14,200, and set at 14,253.77. The broader Standard & Poor's 500-stock Index soared 14.59 points, or 0.96 percent, to 1,539.79. The tech-rich Nasdaq Composite Index climbed 42.10 points, or 1.32 percent, to 3,224.13.

After the surge, the S&P 500 was just 1.6 percent lower than its historical high set in October 2007.

Minutes after the opening bell, the Dow broke through all-time closing high of 14,164.53 and all-time intra-day high of 14,198.10, both being set in October 2007, following a rally in European and Chinese stocks.

"The market pushing towards all-time highs is a bit head scratching indeed. The market was able to start stronger this morning coming off the heels of positive performance out of Europe and China," Gregory J. Keating, managing director of New York- based James E. Coffey Securities Inc, told Xinhua.

The major stock indices from Europe were boosted Tuesday by better-than-expected retail sales in January for the euro area, up 1.2 percent, the biggest gain since December 2009.

China's Shanghai Composite Index surged 2.3 percent on Tuesday, one day after the benchmark index plunged 3.7 percent in the wake of strict measures taken over the weekend by Chinese government to curb rising property prices.

Wall Street also gained momentum from strong non-manufacturing sector activity in the United States. The Purchasing Managers' Index for services sector registered 56 in February, higher than the 55.2 posted in January, according to the Institute for Supply Management's Non-Manufacturing Business Survey.

Investors were still pouring money into stocks, believing the market would continue to move higher, though the U.S. equity market has posted an impressive performance since the beginning of this year.

Tuesday's rally came one day after Warren Buffett's comments on stocks in a CNBC program that stocks were cheaper than other forms of investment, which sent the Dow close to a second all-time high on Monday.

"I think a short term pull back is imminent just for the fact that investors will want do some profit taking as headlines suggest no real solution in sight in the sequester dealings in Washington," Keating said.

"Long term, when you have such a smart investor like Warren Buffet believing in the value of stocks right now, I think that is pretty tough to ignore," he added.

In corporate news, Con-way shares rose 3.92 percent to 36.07 U. S. dollars and FedEx advanced 1.99 percent to 107.91 dollars, sending the bellwether sector index of Dow Jones Transportation Average also to an all-time high.

J.C. Penney shares plunged 10.63 percent to a four-year low as a big shareholder reportedly sold off the store chain's stocks after disappointing quarterly earnings released on Feb. 27.

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