Connect to share and comment
The Dow Jones Industrial Average surged to a new all-time high as trade opened Tuesday, surpassing the record set more than five years ago.
About 45 minutes into trade, the Dow was at 14,255.94, up 128.12 points (0.91 percent) from Monday's close and well past the previous intraday high of 14,198.10 set on October 11, 2007.
The Dow was also more than 90 points above its all-time closing high of 14,164 set on October 9, 2007.
The broad-based S&P 500 picked up 13.55 (0.89 percent) to 1,538.75, still shy of its closing and intraday records also set in October 2007.
The tech-rich Nasdaq Composite Index gained 33.11 (1.04 percent) to 3,215.14.
"This is something that's been building for months and months," Chris Low, chief economist at FTN Financial, said of the record.
"It's always significant, particularly significant because this economic cycle has been so challenging," Low said.
But he predicted the Dow would have trouble keeping its upward momentum in the coming months because of the effects of the US payroll tax increase and the federal spending cuts known as the sequester.
Gregori Volokhine, director of Meeschaert New York, said that while the Dow record was significant, the bigger achievement will be when the S&P 500 breaks its all-time record -- the closing high of 1,565 from October 9, 2007, and the intraday peak of 1,576 struck two days later.
The S&P 500 "represents the 500 biggest companies in the US and gives a very general view of the American economy, while the Dow is more concentrated because it has just 30 companies," Volokhine said.
"So we'll keep the champagne in the refrigerator," Volokhine said.
Greg Peterson, director of research at Ballentine Partners, said there is room for more upward movement because the average ratio of stock price to earnings has come down over time.
"This high is imminently reasonable," Ballentine said. "It's not a bubble."
Virtually all of the components of the blue-chip Dow index moved higher. The gains were broad-based, though most stocks did not pick up more than 1 percent.
The biggest gainers included Cisco Systems (+ 1.9 percent), United Technologies (+ 1.7 percent) and the Bank of America (+ 1.5 percent).
Qualcomm, which manufactures telecommunications equipment, gained 2 percent after announcing a new share buyback program and an increase in its quarterly dividend.
Slumping department store JC Penney slipped 7 percent after shareholder Vornado Realty Trust trimmed its stake in the equity.
Bond prices fell. The yield on the 10-year Treasury rose to 1.89 percent from 1.88 percent late Monday, while the yield on the 30-year bond rose to 3.10 percent from 3.09 percent. Bond prices and yields move inversely.