Dow Closes at 30-Month High

Updated: Wednesday, 09 Feb 2011, 2:47 PM MST
Published : Wednesday, 09 Feb 2011, 2:47 PM MST

(Dow Jones) - Blue-chip stocks squeezed out an eighth consecutive day of gains Wednesday, as investors welcomed a pair of positive earnings and signals of support for the economy from the Federal Reserve.

The Dow Jones Industrial Average mounted a late-day rally to edge higher by 6.74 points, or 0.1 percent, at 12,239.89, a 30-month high. The eight-day streak is the Dow's longest run since last March, adding 3.5 percent to the market. The blue-chip index has added 2.9 percent this month.

Leading the Dow's gains, Walt Disney Co. surged 5.3 percent after the company reported late Tuesday that stronger advertising revenue for television and buoyant home-video sales of "Toy Story 3" boosted first-quarter profit.

Coca-Cola rose 0.3 percent after the soft-drink maker said fourth-quarter profit more than tripled on benefits related to its acquisition of its biggest bottler's North American operations, as well as improved demand abroad.

Also strong were Dow components Hewlett-Packard, 3M and Travelers, all up 1.5 percent or more.

Weighing on the downside were energy companies. Chevron fell 1.5 percent and Exxon Mobil dropped 0.5 percent.

Financials were also weak, with JPMorgan Chase falling 1.4 percent after one of the bank's executives apologized for overcharging 4,500 active-duty military members for mortgages and wrongly foreclosing on 18.

The Standard & Poor's 500-stock index shed 0.3 percent to 1,320.88, while the Nasdaq Composite fell 0.3 percent to 2,789.07.

"We've become so accustomed to strong earnings, I fear the time we don't have a good earnings season," said Dan Cook, chief executive of IG Markets. For the time being, though, Cook said the strong earnings have made traders reluctant to challenge the rally.

Investors started the session cautiously after Asian markets fell broadly overnight as investors there got their first chance to react to the China interest-rate increase that came late Tuesday for those markets. Indexes in Hong Kong, India and South Korea all fell to their lowest closes of the year.

With no economic data on the US calendar, investors also were watching comments to Congress from Federal Reserve Chairman Ben Bernanke, who reiterated his concerns about the strength of the economy while playing down inflation concerns.

"We're not seeing much of a reaction to Bernanke's statement, other than that unemployment is likely to be high for some time," said Mark Turner, head of sales trading at Instinet. "The market's been pretty positive with the earnings numbers and we've been grinding higher. We're definitely overextended and, at some point, due for some sort of a pullback."

Consumer-discretionary stocks were the strongest players among S&P 500 companies, as Sears Holdings gained 2 percent and J.C. Penney added 2.2 percent.

Exchange operator NYSE Euronext surged 14 percent after confirming it is in advanced merger talks with Germany's Deutsche Boerse to create a combined entity to create one of the world's biggest exchange groups.

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