Dow 10,000: First close in a year

Blue-chip average ends at key milestone for the first time since Oct. 3, 2008 following better-than-expected results from JPMorgan and Intel.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Alexandra Twin, CNNMoney.com senior writer

chart_dow_101409_v3.03.gif
What do you think is the most important quality in a job?
  • Satisfying work
  • Good pay and benefits
  • Flexible hours
  • Growth opportunities

NEW YORK(CNNMoney.com) -- The Dow industrials closed above 10,000 Wednesday, ending at the key psychological milestone for the first time in more than a year, following upbeat profit reports from Intel and JPMorgan Chase.

The Dow Jones industrial average (INDU) rose 145 points or 1.5%, finishing at its highest point since Oct. 3, 2008, when it closed at 10,325.38.

The S&P 500 (SPX) index rose 19 points, or 1.8%, and the Nasdaq composite (COMP) added 32 points, or 1.5%.

The advance was broad-based, with 25 of 30 Dow stocks rising. JPMorgan Chase (JPM, Fortune 500), Caterpillar (CAT, Fortune 500), Chevron (CVX, Fortune 500), Hewlett-Packard (HPQ, Fortune 500), IBM (IBM, Fortune 500), 3M (MMM, Fortune 500), United Technologies (UTX, Fortune 500) and Exxon Mobil (XOM, Fortune 500) were the biggest contributors to the Dow's gains.

"Today's market action is all about Intel and JPMorgan and just earnings in general," said Tom Schrader, managing director at Stifel Nicolaus.

He said that the weak retail sales report, released Wednesday, indicates that the economic recovery is not going to be smooth sailing. Nevertheless, "people are looking forward," Schrader added.

While 10,000 is significant on a psychological level, it is not especially meaningful on a technical level.

"I don't put a lot of weight into it just because it's a round number," said Rick Bensignor, chief market strategist at Execution LLC. "The Dow isn't a benchmark for most portfolio managers."

He said that the number isn't going to bring in a new wave of buyers, not after the major gauges have spiked so much in the past seven months.

Since bottoming at 12-year lows in March of this year, the S&P 500 has surged a little over 61% as of Wednesday's close, and the Dow has jumped 53%.

"If the market keeps moving higher it will be because the earnings continue to surpass expectations," he said.

Other than a few modest pullbacks, stocks have mostly managed to keep moving higher, with investors jumping in to buy the dips on worries that they are missing the boat. Repeated calls for a correction of 10% to 15% have gone unmet, and are likely to continue going unmet for the short term, Schrader said.

"The problem is that it is consensus that we need a selloff and consensus is rarely right," he said.

Earnings: Two Dow issues reported better-than-expected third-quarter results, following component Alcoa (AA, Fortune 500)'s better-than-expected profit report last week. The results have fueled hopes that the third quarter could mark a turning point for corporate profits in the same way it seems to have marked a turning point for the economy.

JPMorgan Chase (JPM, Fortune 500) said it earned $3.6 billion in the quarter, as strength in its investment banking business tempered rising loan losses. The company said that consumer loan delinquencies are showing signs of stabilization, but that the trend may not continue.

JP Morgan reported higher quarterly sales and earnings that topped analysts' estimates, according to tracker Thomson Financial. Shares gained 3.3% Wednesday.

Late Tuesday, chipmaker Intel (INTC, Fortune 500) said quarterly sales and earnings fell from a year ago, but topped estimates.

Intel also issued a bullish forecast, saying that it expects fourth-quarter revenue of between $9.7 billion and $10.5 billion versus the $9.51 billion consensus. Intel also said it expects gross margins, a key measure of profitability, in the 59% to 65% range versus the 56.7% consensus. Shares gained 1.7% Wednesday.

Economy: Retail sales fell 1.5% in September, the Commerce Department said, surprising economists who were expecting sales to fall 2.1%.

Sales rose 2.7% in August thanks partly to the impact of the government's Cash for Clunkers auto stimulus program.

Sales excluding autos rose 0.5% in the month versus a rise of 1.1% in August. Sales were expected to rise 0.2%.

Import prices edged up 0.1% in September, the government said, after climbing 1.6% in August. Export prices fell 0.3% in September versus a revised 1.6% in August.

In the afternoon, the Fed released the minutes from the last interest-rate policy meeting. The bankers said that while the economic outlook has improved, activity is still weak. Additionally, most of the bankers raised their economic projections for the second half of the year and for the next two years.

World markets: Global markets were mixed. In Europe, London's FTSE 100 rose 2%, France's CAC 40 gained 2.1% and Germany's DAX added 2.5%. Asian markets ended higher, with the exception of Japan.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.38% from 3.35% late Tuesday. Treasury prices and yields move in opposite directions.

Currency and commodities: The dollar fell versus the euro and the yen, extending its recent losses.

U.S. light crude oil for November delivery rose $1.03 to settle at $75.18 a barrel on the New York Mercantile Exchange, the highest level in a year.

COMEX gold for December delivery fell 30 cents to $1,064.70 an ounce after ending the previous session at a record close of $1,065. Gold has been hitting record highs almost daily in response to a weak U.S. dollar and ongoing concerns about inflationary pressures.

Market breadth was positive. On the New York Stock Exchange, winners beat losers five to two on volume of 1.35 billion shares. On the Nasdaq, advancers topped decliners by nearly three to one on volume of 2.38 billion shares. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
8 must-have travel apps Whether you've got wanderlust or an airline grievance, here are some apps to pack onto your phone. More
Hot stocks: 10 record breaking companies The S&P 500 is trading at all-time highs, and many well-known businesses are leading the charge. Time to buy or sell? More
My biggest retirement mistake Five CNNMoney readers share stories about saving that you can learn from. What they would do differently if they had another chance. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.