Adam Shell, USA Today
Dow, S&P 500 close at new highs; Dow over 17K
Stocks closed higher Thursday as the Dow topped 17,000 for the first time and notched a new all-time closing high, as did the S&P 500.
Powered by a strong jobs report -- 288,000 were added in June, dropping the jobless rate to 6.1% -- the Dow Jones industrial average ended up 0.5% to 17,068.26, the S&P 500 gained 0.6% to 1985.44 and the Nasdaq composite finished up 0.6% to 4485.93.
The Nasdaq ended at a 14-year high.
Literally from the get-go -- the opening bell -- the blue-chip index shot past the big number and stayed comfortably above the milestone through the abbreviated trading day. The closing bell rang at 1 p.m. ET, three hours earlier than usual, because of Friday's July Fourth holiday.
'Let's just hope today's report is not equivalent to a fireworks grand finale,' said market analyst Todd Schoenberger of the jobs news.
European benchmarks jumped on the news that the European Central Bank is keeping rates the same. Britain's FTSE closed up 0.7% to 6865.21, Germany's DAX finished 1.2% higher to 10,029.43 and France's CAC-40 gained 1%, settling at 4489.88.
In Asia, Japan's Nikkei 225 index lost 21.68 points, or 0.14%, to close at 15,348.29 and Hong Kong's Hang Seng fell 30.32 points, or 0.13%, to 23,519.30.
The Dow continued its heady climb into uncharted territory on the eve of the Fourth of July, eclipsing the 17,000 milestone for the first time in its 118-year history and building on the bullish start to the second half of 2014.
After coming within 2 points of 17,000 Tuesday, the Dow finally cracked what Wall Street is dubbing 'Dow 17K' after the government reported that a better-than-expected 288,000 jobs were created last month and the unemployment rate dipped to 6,1%, its lowest level since September 2008.
'The headline jobs number and underlying data reinforces the fact that the domestic economy is thriving,' said Schoenberger, managing partner at LandColt Capital.
It took the Dow 153 trading days to go from 16,000 to 17,000, according to S&P Dow Jones Indices. Compare that to the 21,652 sessions (or more than 75 years) it took to get to Dow 1,000.
Wall Street couldn't help but give the resilient bull some credit.
It signals the 'continuation of a bull market,' said Gary Kaltbaum, president of Kaltbaum Capital Management. 'I am not a big round number person, but I guess it has meaning.'
Historically, it has been nasty bear markets, or multi-year downturns, that have extended the wait to reach fresh 1,000-point Dow milestones. Following the market top in 2007, for example, it took the Dow 1,461 trading days to make the climb from 14,000 to 15,000. Similarly, the Dow's peak in 1999 and subsequent crash resulted in a wait of 1,879 sessions for it to get to 12,000 from 11,000.
The big gains for the blue-chip average come on the heels of a bullish start to the third quarter, with both the Dow and Standard & Poor's 500 index racing to new record highs in the first two sessions of the third quarter. Investors are betting on the economy warming up again after a frigid winter and also see continued support from central banks around the world as a bullish driver.
Indeed, Kaltbaum says the stock market got a fresh wind after the European Central Bank last month talked about implementing a U.S.-style bond-buying program to stimulate the sluggish eurozone economy.
'Greed is picking up,' Kaltbaum adds, 'which usually means higher prices.'
Michael Farr, president of money-management firm Farr Miller and Washington, says Dow 17,000 has a tinge of both good and bad news.
'New (1,000-point) handles on the Dow are always a big deal,' Farr says. 'I've been in the business since the days of Dow 1,700, so this is especially cool to see, or it means that I'm especially old.
'17,000 is a wow and a worry,' Farr adds. 'If the rule is to 'buy low,' this isn't low. New highs are the rewards for disciplined, patient investors. New highs also mean it's more important than ever to be disciplined. This is no time to swing for the fences. But, by all means celebrate. We have all endured a lot to get here.'
Corporate earnings have been climbing, Farr says, which is good for stocks. But price-to-earnings multiples (a common metric used by Wall Street to value stocks) have been climbing too, which is not so good, he adds.
A market dip will eventually come.
Says Farr: 'Investors should always be careful. And now more than ever with the Dow making new highs, investors should remember that markets go down. This market will correct someday, but this should not be a cause for panic.'
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