Dow hits 14,000 for first time since 2007
NEW YORK — The Dow stock market index closed above 14,000 for the first time since before the financial crisis rocked the world economy.
Propelled by strong auto sales and optimism about U.S. jobs, the Dow Jones industrial average crossed the line early Friday and continued flirting with the mark all day. The other major stock indexes also rose.
The Dow was up 149 points to 14,010. It’s gained 6.9 percent this year. The Standard & Poor’s 500 rose 15 to 1,513. The Nasdaq composite index added 37 to 3,179.
The government jobs report that pushed stocks forward was mixed. The U.S. said it added 157,000 jobs in January, in line with expectations. But unemployment inched up to 7.9 percent.
Automakers Toyota, Ford, GM and Chrysler all reported double-digit sales gains for January.The Dow is an index of 30 big companies, and its purpose is to represent how the broader stock market is faring. But the stock market is more a representation of how traders are feeling about the economy than the economy’s underlying fundamentals. And many investors don’t even think the Dow is the best way to track the market: They prefer the much bigger Standard & Poor’s benchmark index, which follows 500 companies.
Joe Gordon, managing partner at Gordon Asset Management in North Carolina, wasn’t celebrating. He doesn’t expect the gains to hold. The fact that small investors are finally getting back in the stock market, he said, makes him think that stocks are due for a downturn. After the Dow hit its all-time record in 2007, it fell almost steadily and had lost nearly 40 percent of its value a year later.
“It is good trivia to talk about on television and the radio,” Gordon said, referring to the 14,000 mark. “It’s meaningless to the average professional.” And for workers still unemployed by the financial crisis, he said, “it really means nothing to them.”
In Europe, tentative and incremental signs of a recovery were enough to push up stocks in France, Britain and Germany. December unemployment in the European Union was lower than analysts had feared, inflation unexpectedly fell, and a survey raised hopes of some growth in the manufacturing sector.
But there were also reminders that the debt problem is far from solved. The Netherlands was also forced to take over one of its major banks, to try to stave off a collapse. In Greece, dock workers extended a strike over the government’s spending cuts.
Among companies making big moves:
— Drugmaker Merck fell 3 percent, down $1.28 to $41.97. Its fourth-quarter profit suffered because of competition from generic medicines against its blockbuster allergy drug Singulair.
— Insurance company MetLife rose 2 percent, or 75 cents, to $38.09, after saying it plans to buy the largest private pension fund administrator in Chile.
— Zoetis, an animal health business that Pfizer just spun off, made its debut on the stock market. It was up 18 percent, rising $4.75 to $30.75.