Dow closes above 12,000 for first time

A quiet day on the US stock markets was crowned on Thursday by a small afternoon rally that allowed the Dow Jones Industrial Average to close above 12,000 for the first time ever.

The landmark for what is still the best-known benchmark for the US stock market came after a day when the market had largely moved sideways, shrugging off the latest economic data.

Instead, the markets were dominated by earnings data for the third quarter, with numerous stocks seeing sharp reactions once they announced profits.

Despite the eye-catching performance for the Dow, regarded as a large-cap index, smaller companies continued to outperform. The Russell 2000 index gained 0.4 per cent for the day and is now up 5.7 per cent for the month, compared with only a 2.3 per cent rise for the S&P 500.

Half of the Dow’s 30 components were up for the day.

Earnings dominated the Dow. Five components, Citigroup, Coca-Cola, Honeywell, McDonalds and Pfizer, reported earnings that were better than expected, although they did not all have a cordial reception from the market.

By the close in New York, the Dow was up 0.16 per cent at 12,011.81, while the S&P 500 index was up only 0.07 per cent at 1,366.9 and the Nasdaq Composite had gained 0.16 per cent at 2,340.94.

Firmly capturing the spotlight was Apple. Its shares gained 6.4 per cent at $79.26 after the company reported a surge in net income late on Wednesday. Its rival Dell, however, balanced it with a 6 per cent fall to $23.18.

Ebay, the internet auctioneer that has been out of favour with the market recently, also enjoyed a sharp rally, gaining 7.4 per cent to $30.60 in reaction to its earnings report.

UPS was up 4.3 per cent at $75.54 and Pfizer was 0.6 per cent higher at $28.26 on good earnings.

Citrix Systems plunged 19 per cent to $28.44 after investors expressed concern over the infrastructure software and services company’s licensing revenues.

It was not a good day for the semiconductor sector. AMD saw its shares fall by 10.4 per cent to stand at $21.72. Cypress Semiconductor was also sharply lower, down 9.1 per cent to $17.24 after it said that it was no longer considering strategic options including a sale of the company.

Altria was the strongest-performing Dow component, gaining 2.36 per cent to $80.19, while Coca-Cola was 2.2 per cent higher at $44.93 after it reported better-than-forecast earnings.

Also higher was AT&T, up by 2.9 per cent at $33.89 and touching a new peak for the past year after an upgrade by Lehman Brothers.

Banks had a bad day. Bank of New York dropped 2.8 per cent to $33.85 after announcing a 10 per cent fall in net income.

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