Thread: Dow Tops 11,000 for First Time Since May

Dow Tops 11,000 for First Time Since May

By CHRISTINE HAUSER
Published: October 8, 2010

The Dow broke through 11,000 on Friday for the first time since May, the latest mile marker in a rally that started in early September and has pushed the index up about 9 percent since then.

The surge this week has been fueled by expectations that more central banks, including the Federal Reserve, could follow the Bank of Japan in taking steps to stimulate their economies. And the move over the 11,000 level came after a disappointing jobs report which renewed expectations that the Fed could make its move at its next meeting in early November.

The last time the Dow Jones Industrial Average broke through 11,000 was on May 4, when the high during the day reached 11,149.48 points before it fell back and closed at 10,926.77.

The Dow reached 11,000.19 at 11:25 a.m. Friday and bobbed around the 11,000 threshold in subsequent trading; by 2 p.m. it had fallen slightly below again. . If the Dow finishes the day above 11,000, it would be the first such close since May 3, when the session ended at 11,151.83.

Robert S. Tipp, a managing director and chief investment strategist for Prudential Fixed Income. cautioned against reading too much into the Dow breaking into new terrain.

“The market looks undervalued and I would expect to see resistance levels taken out,â€

And just before elections this happens........hmmm

Jobs stink, Dow surges. What's up?

Click chart for more market data.
By Hibah Yousuf, staff reporter
October 8, 2010: 4:25 PM ET

NEW YORK (CNNMoney.com) -- Stocks rallied Friday, with the Dow crossing 11,000 and closing above the key level for the first time in five months.

The buying frenzy came after a sharp drop in the overall jobs figures in September boosted the chances of the Fed stepping in to stimulate the economy.

60Email Print Comment"The jobs number was terrible, but it clinches the deal for another round of stimulus from the Fed on Nov. 3, and that's why the markets are screaming today," said Phil Orlando, chief equity market strategist at Federated Investors.

The Dow Jones industrial average (INDU) rose as much as 84 points, or 0.5%, to a fresh-five month intrady high of 11,032. It eased from that level in the afternoon, but still finished with a 58-point gain, led by Alcoa (AA, Fortune 500) and Caterpillar (CAT, Fortune 500). The Dow closed at 11,006, its highest level since May 3.

The last time the blue chip index traded above that level was just days before the"flash crash" that sent the Dow tumbling nearly 1,000 points in one day.

The S&P 500 (SPX) also spiked to its highest level since May, gaining 4 points, or 0.6%, on Friday. And the tech-heavy Nasdaq (COMP) added 18 points, or 0.8%, and to finish at a fresh five-month high.

How to earn a cool 4%
All three major indexes had been drifting between small gains and losses during the first two hours of the session before the rally kicked in.

Jobs and the Fed: With unemployment figures remaining one of the defining measures of the recovery, the Labor Department's monthly jobs report has been a major market mover all year.

"The September report is another sign that the recovery remains on shaky grounds," said Peter Tuz, president at Chase Investment Council.

The economy lost 95,000 jobs in September, the government said, though the private sector added 64,000 jobs. Unemployment rate remained unchanged at 9.6%.

"The economy's sluggishness also increases the odds of the Fed pumping more money into the financial system, which is viewed as a positive sign among some investors, because it adds liquidity to the system," Tuz said

He expects the market to continue moving higher, in part on speculation about Fed action. Stocks could also gain some traction if third-quarter financial results start coming out stronger than expected.


0:00 /01:21Farrell: We underrated unemployment
Economy: Investors also eyed a report on wholesale inventories from the Commerce Department. Inventories increased 0.8% in August, following a 1.5% gain in July. Economists were expecting a 0.4% rise.

Companies: After the bell Thursday, Investors welcomed strong earnings from Alcoa -- the first of the Dow components to report third quarter results.

The aluminum giant earned 9 cents per share -- excluding special items -- topping Wall Street's estimates for 5 cents per share. Sales rose 15% to $5.3 billion, beating forecasts for $4.96 billion in revenue. Shares of Alcoa (AA, Fortune 500) rose 5.7%.

Bank of America (BAC, Fortune 500) dropped 1% in the afternoon, after the bank announced it is suspending foreclosures in all 50 states as its reviews possible documentation problems. Last week, Bank of America froze foreclosures in the 23 states where a court's approval is required to foreclosure on a home.

French drugmaker Sanofi-Aventis (SNY) said that it will cut 1,700 jobs in the United States before the end of the year. The company's stock rose 0.5%.

World markets: European stocks closed mixed Friday. Britain's FTSE 100 and France's CAC 40 edged lower, and the DAX in Germany added 0.3%.

Asian markets finished the session mixed. Japan's Nikkei index fell nearly 1% and the Hang Seng in Hong Kong rose 0.3%. Coming back from a week-long holiday, China's Shanghai Composite soared 3.1% after Moody's said it may raise the nation's debt rating.

Currencies and commodities: The dollar remained under pressure, as the greenback fell against the Japanese yen and the British pound. It rose slightly against the euro.

The dollar index, which measures the buck against a basket of currencies, has dropped nearly 0.8% so far this week, and continues to decline.

Gold futures climbed Friday, but remained below record highs hit earlier this week. Prices rose $10.13 an ounce Friday to settle at $1,345.30 an ounce. The precious metal settled at an all-time high of $1,347.70 Wednesday, and touched an intraday high of $1,366 an ounce on Thursday.

The price of crude oil for November delivery added 99 cents to settle $82.66 per barrel.

Bonds: The price rose on the benchmark 10-year U.S. Treasury, pushing down the yield to 2.38%.

http://money.cnn.com/2010/10/08/markets ... gletoolbar

Originally Posted by JohnDoe2

Jobs stink, Dow surges. What's up?
The buying frenzy came after a sharp drop in the overall jobs figures in September boosted the chances of the Fed stepping in to stimulate the economy.

The Fed is already stimulating the economy!!! That's the only reason the stock market has gone up, they are printing more money! If you notice, Gold has gone up much more than the stock market, which means in terms of REAL money (an ounce of gold), the stock market has dropped!!