By: Chris Kelly, Contributing Editor
For the first time in history, the Dow Jones industrial average surged past 13,000. Stock activity was driven by a growing corporate America with better-than-expected economic figures and rising corporate earnings, a good sign for the mortgage market.
The achievement is due to many of the country's biggest companies exceeding analysts' first-quarter earnings projections. Among the market's top movers include Corning Inc., PepsiCo Inc., Colgate-Palmolive Co. and Boeing Co. Of the 30 components in the Dow, 19 have reported earnings and 13 have exceeded expectations. These results have boosted the index to three record closes last week and pushed the index to a record high today. In addition, the market received a slight increase from the Commerce Department's report on durable goods orders from last month, showing a stronger-than-expected demand for big-ticket items. The results revealed the biggest gain since September 2004 and provided much needed reassurance for investors. Share prices also gained when the Commerce Department released its report on new home sales and prices in March. The results indicated a slight recover from February's numbers with a 2.6 percent growth, the first in three months.
Historically, the Dow has been the best-known indicator for the stock market. Other stock indexes include Standard & Poor's and NASDAQ, which also rose Wednesday. The Dow became the first of the three major indexes to recover from the market's lingering decline since the start of 2000.
Since the previous high was broken in October, the Dow has slowly increased in 16 straight quarters to reach its new all-time high of 13,036.99. The benchmark reached the 13,000 milestone 128 trading days after hitting 12,000, about 15 times faster than the previous thousand-point advance.
The S&P 500 has yet to reach its closing peak of 1,527.46, reached in March 2000; NASDAQ has also not come close to its high of 5,048.62, also reached in March 2000.
This latest achievement does not guarantee future growth as there are still economic reports that could cause market setbacks and volatility. Investors will soon be able to examine economic activity in assorted U.S. regions when the Federal Reserve's Beige Book is released today at 2pm.
