Major European indexes rose, including a 5 percent surge in Greece’s ATHEX. The euro rose slightly to $1.32, indicating confidence in Europe.
BY CHRISTINA REXRODE | THE ASSOCIATED PRESS
NEW YORK — The Dow edged teasingly close to the 13,000 marker on Friday, a milestone it hasn’t reached since before the financial crisis brought the U.S. economy to its knees.
The Dow Jones industrial average rose 45.79 points, or 0.4 percent, to close at 12,949.87, its highest close for the year so far. That followed a 123-point surge the day before, when it also set a closing record for 2012.
The rest of the market struggled for direction on what turned out to be a quiet news day as traders prepared for the long Presidents Day weekend. The Standard & Poor’s 500 rose 3.19 points, or 0.2 percent, to 1,361.23, also setting a record close for 2012. The Nasdaq composite, after surging Thursday, fell 8.07 points, or 0.3 percent, to 2,951.78.
The Dow hasn’t closed above 13,000 since May 19, 2008, a time when the Bush administration was still in charge, Lehman Brothers and Merrill Lynch still existed, and unemployment was just 5.4 percent, compared to the current 8.3 percent.
Though 13,000 in some ways would be just a number on a board, with no direct bearing on the fundamentals of the economy, its psychological effect could still be important. People and businesses tend to spend based on how they feel about the economy, and big round numbers can affect feelings just as much as money in the wallet.
“It’s not an insignificant psychological barrier,” said Marc Scudillo, managing officer at EisnerAmper in New Jersey. “People still need to have that vote of confidence that investing in U.S. companies is still the right direction to go long-term.”
On the other hand, popping up to 13,000 could also have a contradictory effect on the Dow. It would almost certainly trigger requirements in some investment firms to sell off some of their stocks, which could briefly push the index back down.
By some accounts, the market is stalling out under the weight of conflicting headlines about the U.S. economy and about Greece, which is trying to secure rescue loans from other European countries so it won’t default on debt due next month.
Though recent news about jobless claims and housing starts have been incrementally better, they’re still far below where they need to be for a full recovery. Greece and its lenders no sooner hammer out one portion of a debt deal before they find something else to disagree on. In the 33 trading days of 2012 to date, the Dow has risen on 19 and fallen on 14.
The yield on the benchmark 10-year Treasury note rose to 2.01 percent from 1.99 percent late Thursday. That’s a sign investors are moving money out of safe-haven government bonds and into riskier investments like stocks.
Major European indexes rose, including a 5 percent surge in Greece’s ATHEX. The euro rose slightly to $1.32, indicating confidence in Europe.