Why is this man smiling? The Dow closed above 16,000 for the first time, buoyed by upbeat economic news.
They finally did it. After trying for several sessions to break through the 16,000 closing barrier for the Dow, investors gave up their qualms and hurdled the milestone Thursday.
The Dow unofficially closed at 16010.12, up 109.30, buoyed by jobless claims data earlier in the day that showed the number of Americans filing for jobless benefits declined to a near two-month low.
"Jobless claims were better on the margins, inflation picked up a little, but no significant change there, and earnings and companies continue to do fairly well. And the market was drifting down, so it puts you a in a position where it doesn't take much good news to resume the rally," said Doug Foreman, co-chief investment officer at Kayne Anderson Rudnick.
Making a triple-digit jump to close above 16,000 for the first time, the Dow Jones Industrial Average also turned positive for the week, with its gains led by Intel.
Halting its longest-running loss streak in eight weeks, the S&P 500 rose, with financials leading gains and telecommunications the worst performing of its 10 major industry groups. The Nasdaqalso climbed.
The CBOE Volatility Index (VIX), a measure of investor uncertainty which has advanced 3.9 percent this week, fell to 12.66.
The U.S. dollar fell against other global currencies, while the price of oil rose to a three-week high and the cost of gold declined.
After climbing to its highest since September, the yield on the benchmark 10-year Treasury note declined 1 basis point 2.79 percent.
"Interest rates are fairly low by historical standards. Over time they are going to go up, especially if the economy really recovers. And ultimately that's a good thing," said Foreman of the instrument used in determining mortgage rates and other consumer loans.
On Wednesday, stocks fell and Treasury yields jumped after minutes from the Federal Reserve's last policy meeting had officials generally in agreement that improving economic conditions would pave the way to reduced asset purchases by the Fed in the months ahead.
And, while the jobs data came in better than expected on Thursday, "market participants are still reacting to the Fed minutes indicating that it's not just the jobs market that they are looking at, and they may reduce asset purchases sooner than expected," said Kate Warne, investment strategist at Edward Jones. "Clearly with the rebound we're seeing, the market is not expecting December," added Warne of the likely month that the central bank will start reducing the scope of its $85 billion in monthly purchases of bonds and mortgaged-backed securities.
First published November 21 2013, 1:05 PM