The Dow Jones Industrial Average rose, closing above 13,000 (INDU) for the first time since May 2008, after a better-than-estimated consumer confidence report bolstered optimism in the world’s largest economy. The Standard & Poor’s 500 Index increased 0.3 percent to 1,372.24 at 4 p.m. New York time, according to preliminary closing data. The Dow Jones Industrial Average advanced 23.84 points, or 0.2 percent, to 13,005.35. The 30-stock measure turned lower at the close of trading yesterday after failing to hold above 13,000 for the third session in the past week.
“The U.S. economy is in decent shape,” Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania, said in a telephone interview. “Technicals aside, we’re really not that concerned. Stocks are relatively cheap.”
Today’s rally put the S&P 500 on pace for a third month of gains, the longest streak in a year, amid better-than-estimated economic and corporate data. It rose 4.6 percent this month. The index trades at about 14.1 times reported earnings, compared with the average since 1954 of 16.4 times, according to data compiled by Bloomberg.
Stocks rose as the Conference Board’s index increased more than forecast in February, to 70.8. The euro strengthened versus the dollar before the European Central Bank provides funds tomorrow to support banks. Earlier today, stocks fell as orders for U.S. durable goods fell in January by the most in three years. Separate data showed that home prices in 20 U.S. cities dropped more than forecast in December.
“I don’t have rose-colored glasses on, but I think the path of least resistance is up,” Richard Weeks, the Vienna, Virginia-based managing director and partner at HighTower’s VWG Wealth Management. His firm oversees more than $20 billion. “The news is generally good. Short-term, all signs say that risks have been reduced.”
