The Dow Jones industrial average surged to a new record high on Tuesday, surpassing a record held since 2007 and reflecting the dramatic turnaround in the stock market almost four years to the day after it hit a bear-market low during the financial crisis.
The Dow closed at 14,253.77, up 125.95 points or 0.9 per cent – comfortably above its peak on Oct. 9, 2007, when it closed at 14,149.15. From its bear-market low in March 2009, the Dow has risen nearly 118 per cent, no doubt raising thoughts about how far this bull market recovery can go.
The S&P 500 also rallied on Tuesday, but remained about 1.6 per cent shy of its peak. It closed at 1539.79, up 14.59 points or nearly 1 per cent.
In Canada, the S&P/TSX composite index closed at 12,736.04, up 28.63 points or 0.2 per cent. By comparison to U.S. indexes, the TSX has lagged: It remains 16 per cent off its record high in 2008.
The decisive gains on Tuesday follow what had been a flirtation with the Dow’s record in previous sessions. The blue-chip index came close last Thursday, only to slump in afternoon trading and ending the day in the red. Since then, it has risen for three straight days.
The latest jump follows an upbeat reading on U.S. service sector activity, which represents about 70 per cent of economic activity. The ISM non-manufacturing index rose to 56 in February, up from 55.2 in January and ahead of economists’ expectations.
More broadly, investors have looked beyond a recent flareup of the European sovereign-debt crisis that followed Italian elections, concerns that the Federal Reserve is rethinking its economic stimulus policies, and the impact of broad spending cuts related to the political impasse in Washington.
The rally could be seen elsewhere, too. In Europe, the U.K.’s FTSE 100 rose 1.4 per cent and Germany’s DAX index rose 2.3 per cent. In Asia, China’s Shanghai stock exchange composite index rose 2.3 per cent.
The gains on Tuesday were broad: 28 of the 30 stocks in the Dow were up, led by Cisco Systems, United Technologies, Boeing Co. and Hewlett-Packard Co., all of which saw gains of 2 per cent or more.
Within the S&P 500, all 10 subindexes were higher. Technology stocks showed the biggest gains, rising 1.5 per cent – helped out by a rally by Apple Inc. Apple gained 2.6 per cent, its biggest gain in a month and its first gain in five sessions.
Key commodities nudged higher, although from low levels. Crude oil rose to $90.82 (U.S.) a barrel, up 70 cents – a day after hitting its lowest level of the year and dipping below the $90-a-barrel threshold. Gold rose to $1,574.90 an ounce, up $2.50.
Among Canadian commodity producers, Suncor Energy Inc. rose 0.8 per cent and Barrick Gold Corp. fell 0.3 per cent.
The Bank of Nova Scotia rose 0.7 per cent after reporting its fiscal first-quarter numbers. Profit rose 13 per cent, to $1.6-billion (Canadian) or $1.25 a share – topping analysts’ expectations after accounting for unusual items. Scotiabank also boosted its dividend by 5 per cent.