Dow claims highest close on record
Blue-chip index breaks above 12,800 for first time, capping big rebound after February selloff.
NEW YORK (CNNMoney.com) -- The Dow industrials jumped to a record high Wednesday as solid earnings from a number of blue-chip companies helped the index complete a remarkable comeback after the big February selloff.
The Dow Jones industrial average (up 27.22 to 12,800.26, Charts) climbed nearly 31 points and ended above 12,800 for the first time. The previous record closing high was 12,786.64 set on Feb. 20.
During the session the 30-share Dow also hit a new intraday trading high of 12,838.46, also breaking a record from Feb. 20.
The rally capped a big turnaround for the Dow, which tumbled 416 points on Feb. 27, its biggest loss in 5-1/2 years, on worries about slowing economic growth and market volatility abroad.
Treasury prices rose, driving down yields while the dollar fell versus the euro and yen and tumbled to a 26-year low against the pound. Oil prices were little changed.
Here's a look at what was moving near the close.
The earnings picture was by and large strong Wednesday, with a few disappointments. Results from Intel, JP Morgan Chase and United Technologies impressed investors, while IBM and Yahoo (Charts, Fortune 500) earnings came in below expectations.
"The market is driven by the fact that first-quarter earnings are higher than what the Street was looking for," said Ron Kiddoo, chief investment officer at Cozad Asset Management. "People were expecting 4 percent gains, but we were talking about 10 percent, and it looks like we're closer to the right number."
"And there's no bad world news right now - it's just status quo. We could get dampened by bad world news or a really bad earnings announcement, but that hasn't happened yet," he added.
Roughly one-fifth of the S&P 500 is reporting results this week, including 12 Dow components. First-quarter earnings are currently on track to have risen 3.6 percent from a year ago, according to the latest Thomson Financial figures, after rising more than 10 percent each quarter for more than three years.
After the close Tuesday, IBM reported higher quarterly earnings that met estimates and higher sales that topped forecasts. IBM also reiterated its earlier 2007 earnings forecast.
But analysts focused on the company's sluggish U.S. sales growth and both Credit Suisse First Boston and Goldman Sachs downgraded the stock Wednesday morning, Reuters reported. IBM (down $2.32 to $94.80, Charts, Fortune 500) shares fell 2.5 percent.
Intel (up $0.37 to $21.35, Charts, Fortune 500) reported higher first-quarter earnings that met estimates on lower revenue that missed forecasts late Tuesday. The company also said that gross margins, a key measure of profitability, rose in the quarter. Shares gained 1.3 percent Wednesday morning.
Linear Technology (up $3.92 to $36.04, Charts) jumped 11 percent in active Nasdaq trade after the chipmaker late Tuesday reported a decline in quarterly earnings that was in line with expectations and also announced a $3 billion stock buyback plan.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 8 to 7 on volume of 1.29 billion shares. On the Nasdaq, decliners topped advancers 3 to 2 on volume of 1.74 billion shares.
U.S. light crude oil for May delivery fell 10 cents to $63 a barrel on the New York Mercantile Exchange, in volatile trading after the release of the weekly oil inventory report.
COMEX gold for June delivery rose 80 cents to $693.80 an ounce.
Treasury prices climbed, lowering the yield on the benchmark 10-year note to 4.66 percent from 4.68 percent late Tuesday. Bond prices and yields move in opposite directions.
In currency trading, the dollar fell versus the euro and yen and hit a 26-year low against the pound.
In other news, Merrill Lynch's April global fund manager survey showed most of those surveyed think stocks are still fairly valued even after the recent rally.
After plunging in late February on global growth concerns, stocks have bounced back in March and early April.