I guess are things are looking up!
The Dow Jones industrial average crossed 12,000 points on Wednesday, fueled by President Obama call for a lower corporate tax rate and higher-than-expected new home sales in December.
The last time the index closed above that level was on June 19, 2008.
In midmorning trading, the Dow was 35.19 points or 0.29 percent, higher at 12,012.31, and the Standard & Poor’s 500-stock index was up 6.44 points, or 0.50 percent. The Nasdaq rose 19.58 points, or 0.72 percent.
And the Commerce Department reported Wednesday that sales of new homes rose 17.5 percent in December from November to a seasonally adjusted annual rate of 329,000 units. Still sales for all of 2010 were down 14.4 percent from 2009, agency said.
Shares in Europe were also higher. The FTSE in London was 1.3 percent higher. In Frankfurt, the DAX rose 1.2 percent, and the CAC 40 in Paris gained 1. percent.
When the Dow first crossed the 12,000 threshold, in October 2006, unemployment was under 5 percent and the economy was growing at 2 to 3 percent a year. Today, unemployment hovers near 10 percent and the economy has struggled to grow.
The markets returned to the 12,000 level in 2008 as the financial crisis was starting to unfold and some banks were warning of write-downs of debt. This week, investors are weighing tentative signs of a pickup in the economy, with factory production, retail sales and existing-home sales rising and unemployment claims trending down, and generally strong quarterly profit reports from a majority of companies.
But trading has been lukewarm ahead of the Federal Reserve policy-making arm’s first meeting of the year on Wednesday. The Fed is expected to leave rates unchanged, but traders will be closely watching for an update on the state of the economy.
Uri Landesman, president of the Platinum Partners hedge fund, said that while markets have been move higher, there was still some uncertainty about the economy.
“I would say that a five-month rally in the face of decidedly mixed economic data is unusual,” he said. “What it suggests to me is it is going to reverse itself. It is going to pause and regroup.”
“If you have a double dip in housing and nobody is employed the consumer is going to go back in hiding,” Mr. Landesman said.
He said he is estimating the S.&P. to fluctuate between 1,100 and 1,400 throughout the year, with a key resistance break-through at 1,305 signifying that the market has upward strength.