New York Report: Dow ends over 16,000 for first time in history
THE DOW industrials closed above 16,000 for the first time last night as stocks rebounded from three days of weakness, after economic data pointed to a slowly improving labor market and subdued inflation.
Financial shares led the market to its first day of gains after three sessions of losses. Although investors remain unsure about the timing of the Federal Reserve’s scaling back of its $85bn per month in bond buying, some say the market will weather the eventual pullback in that stimulus.
The Fed has said repeatedly that it will not withdraw support until the economy can stand on its own.
The annual inflation rate is at one per cent, below the Fed’s target of two per cent.
James Bullard, president of the Federal Reserve Bank of St Louis and a voting member of the Fed’s rate-setting committee, said yesterday that the inflation data gives it some leeway to keep the current accommodative policy in place.
“What we need to do is continue with the programme for now as we have, but if an inflation problem starts to develop, we have to be willing to move to arrest that problem,” Bullard told a University of Arkansas event. “At that point, I would put on my inflation hawk hat and spring into action.”
The Dow Jones industrial average shot up 109.17 points, or 0.69 per cent, to close at a record 16,009.99.
The Standard & Poor’s 500 Index gained 14.48 points, or 0.81 per cent, to finish at 1,795.85.
The Nasdaq Composite Index climbed 47.89 points, or 1.22 per cent, to end at 3,969.16.