Dow ends short of 12,000 but still at highest since mid-2008
A late bout of selling on Wednesday pushed the Dow Jones industrial average below the 12,000 mark, denying Wall Street another milestone in its recovery -- at least for one more day.
The blue-chip index ended the day up 8.25 points, or 0.07%, to 11,985.44, its highest close since June 2008.
The Dow had traded as high as 12,020 early in the session, and with seven minutes to go still was above 12,000. But sellers took the index down by the closing bell. A modest slide in IBM shares hurt because the tech titan is the highest-priced Dow member. IBM rose as high as $161.90 but ended the day at $161.04, off 40 cents from its record close of $161.44 on Tuesday.
Still, stocks were broadly higher, helped by the Federal Reserve’s renewed pledge to keep pumping money into the financial system to underpin the economic recovery.
The Standard & Poor’s 500 index rose 0.4% to 1,296.63, its best close since August 2008.
The technology-dominated Nasdaq composite gained 0.7% to 2,739.50. The Nasdaq had hit a three-year high of 2,765 on Jan. 18, then pulled back late last week before resuming its climb this week.
The Dow has become the best performer among the major indexes this month after profit-taking last week slammed small- and mid-size stocks -- the stars of last year's rally.
The Russell 2,000 small-stock index sank 4.3% last week while the Dow added 0.7%. Investors often turn to blue-chip issues when riskier market sectors get hit.
The 30-stock Dow is up 3.5% year to date, compared with a 1.3% rise for the Russell 2,000 and a 3.1% advance for the S&P 500.
Despite many small investors' continued mistrust of the market after the 2008 crash, stocks have plowed ahead for nearly two years -- with a big assist from the Fed's easy-money policy.
Fed Chairman Ben S. Bernanke "has spelled it out: He wants the market to go up," said Quincy Krosby, chief market strategist at Prudential Financial. With the housing market still struggling, the Fed wants higher share prices to boost investors' wealth and give them more wherewithal to spend.
The Dow now has risen 5,438 points, or 83%, since it bottomed at a 12-year low of 6,547 on March 9, 2009. The index is down 2,179 points, or 15.4% from its record close of 14,164.53 on Oct. 9, 2007.
-- Tom Petruno
Photo: The bronze bull statue near Wall Street in lower Manhattan. Credit: Chris Hondros / Getty Images