Dow tops 12,000, buoyed by earnings, manufacturing rise

By David K. Randall, AP Business WriterUpdated 39m ago |

NEW YORK — The Dow Jones industrial average closed above 12,000 for the first time in 2 1/2 years — yet another sign that the economy is extending its recovery from the recession.

Another big stock market index, the Standard & Poor's 500, reached a milestone of its own Tuesday. It closed above 1,300.

Investors found plenty of reasons to send stocks sharply higher. Earnings reports from companies including Pfizer, UPS and Archer Daniels Midland were better than expected. And manufacturing had another good month in January.

The Institute of Supply Management said Tuesday that manufacturing activity expanded in January at its fastest pace in nearly seven years. Increased spending by businesses and consumers helped push the index higher, the company said.

"This is a good indicator that businesses have come out of the gate strongly in 2011," said Burt White, chief investment officer for LPL Financial. "We are seeing businesses spend again and this is exactly what we needed to see for this economy to move forward."

The better economic data helped push stocks broadly higher. All 10 company groups that make up the S&P index rose. Materials companies rose 2.6%, the largest gain of any group.

How is the Dow doing?

Dow Jones industrial average, five days The Dow gained 148.23, or 1.3%, to 12,040.16. It last closed above 12,000 in June 2008, although it traded above that level several times last week before settling lower.

The S&P 500 index gained 21.47, or 1.7%, to 1,307.59. It last closed above 1,300 in August 2008.

The Nasdaq composite index rose 51.11, or 1.9%, to 2,751.19

Before the market opened, Archer Daniels Midland said that its profit jumped 29% last quarter because of growing demand for grains. The agriculture conglomerate easily beat analyst estimates. Its stock jumped 6%.

United Parcel Service Inc. said its 2011 earnings will likely top its pre-recession levels from 2007. UPS gained 4%.

Pfizer Inc. said its fourth-quarter profit nearly quadrupled and its revenues rose 6%. The company narrowly beat analyst estimates and gained 6%. That was the best performance among the 30 stocks that make up the Dow index.

McDonald's Corp. was the only stock in the Dow to fall, losing 0.3%.

General Motors Co. said that sales of cars and trucks in the U.S. rose 23%, well above what analysts had forecast. But the company dipped 0.1% to $36.45.

Electronic Arts and Boston Scientific are among the companies that will report earnings by the end of the day.

Bond prices fell, sending their yields higher. The yield on the benchmark 10-year Treasury note rose to 3.42 from 3.38% late Monday.

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