Dow index hits new multiyear high, and so does oil
The Dow Jones industrial average eked out a new multiyear high Monday, even as crude oil prices did the same.
Stocks overall ended mostly higher but traders said the market looked tired after the rally Friday that followed the upbeat March employment report. In a sign of flagging momentum, trading volume was the lowest so far this year.
The Dow (charted at left) added 23.31 points, or 0.2%, to 12,400.03. That was enough to top the previous 2011 closing high of 12,391.25 reached Feb. 18, and put the index at its highest level since June 5, 2008.
The Dow is the first big-stock index to recoup all of the losses from the modest sell-off that hit the market from mid-February to mid-March. The blue-chip Dow fell 6.3% from Feb. 18 to March 16.
The broader Standard & Poor’s 500 index Monday edged up fractionally to close at 1,332.87, but remains 0.8% below its Feb. 18 high of 1,343.01.
The winter slump in stocks coincided with surging oil prices in mid-February, as Libya descended into open warfare between rebels and forces loyal to strongman Moammar Kadafi.
Crude prices then pulled back briefly after Japan’s devastating earthquake and tsunami, but have risen in four of the last five sessions, taking their cue from worries about continuing unrest in the Middle East and North Africa.
Near-term U.S. oil futures added 53 cents Monday to $108.47 a barrel, the highest closing price since September 2008. The price has soared 28% from $84.32 on Feb. 15.
The London oil price, which is considered a better gauge of world prices, topped $121 a barrel, rising $2.32 to $121.02.
Stock bulls say Wall Street has been able to overcome the latest jump in oil because investors are focused on the U.S. economy’s strength, particularly the improving job market. The economy added a net 216,000 jobs in March, exceeding expectations, the government said Friday.
The continuing boom in corporate takeovers also is boosting sentiment. Late Monday computer chip giant Texas Instruments said it would pay $6.5 billion for National Semiconductor.
Still, even some of the market’s biggest cheerleaders say stocks’ rebound since mid-March is overdone. The Dow has surged 6.8% in 13 trading sessions.
“Our investment posture is still very, very bullish for the long-term, but it would make us a little more bullish, especially for the short-term, if we could see a pause to refresh and a pause to drive some of [the] speculators back to their caves,” Don Hays, founder of Hays Advisory, said in a note to clients Monday.
-- Tom Petruno