Dow hits 14,000 for 1st timeBlue-chip average strikes milestone as a generally tame inflation report and strong earnings drive gains.NEW YORK (CNNMoney.com) -- Stocks rallied Tuesday morning driving the Dow Jones industrial average over 14,000 for the first time ever as investors cheered a tame inflation reading in addition to several strong earnings reports. The Dow (up 40.24 to 13,991.22, Charts) gained about 0.3 percent, briefly touching 14,002.60 before retreating.
The tech heavy Nasdaq composite index (up 11.13 to 2,708.46, Charts) added 0.4 percent, and the broader Standard & Poor's 500 index (up 3.60 to 1,553.12, Charts) was up 0.3 percent two hours into the session. Major gauges were mixed Monday ahead of the week's earnings figures and inflation reports, but the Dow finished in record territory for the third straight session. Stocks rose early Tuesday after the Labor Department released its report on the prices of goods at the wholesale level. The government said wholesale prices fell 0.2 percent in June, versus expectations for a rise of 0.1 percent. The closely watched core Producer Price Index, which excludes food and energy costs, rose 0.3 percent. That exceeded consensus forecasts for a gain of 0.2 percent, but wasn't enough to rattle investors. "That there isn't increasing inflationary pressure added to the market's momentum," according to Art Hogan, chief market strategist at Jefferies & Co. Plus, the PPI report "gives us a window into the CPI report tomorrow," he added. "Hopefully the CPI comes in as benign as the PPI." On the move Dutch-based chemical company Basell agreed to buy Lyondell Chemical (up $6.65 to $46.77, Charts, Fortune 500) for $48 a share, or about $12.1 billion. Including the assumption of debt, the deal is valued at $19 billion. Plains Exploration & Production (down $1.99 to $49.20, Charts) agreed to buy oil and gas producer Pogo Producing (up $7.35 to $57.83, Charts) for $3.6 billion in stock and cash. And the CEO of Dow Jones (down $0.22 to $56.73, Charts) has tentatively agreed to News Corp.'s (up $0.56 to $24.19, Charts, Fortune 500) $5 billion takeover bid, although approval from the Bancroft family is still required, according to a report in the Wall Street Journal. On the earnings front, Coca-Cola (down $0.51 to $53.34, Charts, Fortune 500) reported a rise in quarterly profit early Tuesday, boosted by strength in emerging markets. Merrill Lynch (down $0.64 to $86.75, Charts, Fortune 500) beat second-quarter earnings estimates, sending shares up slightly. Shares of KeyCorp (up $1.37 to $36.47, Charts, Fortune 500) jumped 3 percent after the Midwest bank said second-quarter profit rose 8 percent, surpassing estimates. Johnson & Johnson (down $1.18 to $62.62, Charts, Fortune 500) also posted solid earnings, with its results exceeding Wall Street's estimates. After the market close, Intel (up $0.27 to $26.22, Charts, Fortune 500) and Yahoo (up $0.04 to $26.74, Charts, Fortune 500) are set to kick off the reporting period for the tech sector. Market breadth was positive. Winners edged out losers on the New York Stock Exchange by a margin of three to two on volume of 450 million shares. Gainers beat decliners by nearly four to three on the Nasdaq on volume of 700 million shares. Oil prices turned higher, reaching an 11-month high. U.S. light crude for August delivery gained 80 cents to $74.95 a barrel on the New York Mercantile Exchange. Treasury prices fell, with the yield on the benchmark 10-year note rising to 5.09 percent from 5.04 percent late Monday. The dollar held near a record low against the euro and was steady against the yen. COMEX gold for August delivery gained $1.40 to $667.70 an ounce. In global trade, European stocks fell in afternoon trade, while Asian markets finished the session little changed. |
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