- The Washington Times - Wednesday, February 14, 2007

NEW YORK (AP )— The Dow Jones industrials set new highs yesterday as stocks extended their gains for a second day after Federal Reserve Chairman Ben S. Bernanke told a Senate panel that the economy should grow modestly this year and that he expects inflation to continue to ease.

Wall Street, which had worried whether Mr. Bernanke might sound a hawkish note on inflation, welcomed his benign remarks. Although investors might debate whether the Fed will lower short-term interest rates later this year, Wall Street appeared more confident that the central bank was at least likely to leave rates unchanged, as it has in recent meetings.

Investors pleased by a sense that the overall economy is doing well managed to look past a Commerce Department report that retail sales were essentially flat in January amid slumping automobile sales. It was the weakest showing in three months and below what Wall Street had forecast.

“I think what we’re having is a victory lap. So far the Fed’s forecasts have been almost been spot on,” said Drew Matus, senior economist at Lehman Brothers Inc. “So what this tells us is that the Fed is most likely not in any hurry to move rates in either direction.”

The Dow Jones Industrial Average rose 87.01, or 0.69 percent, to 12,741.86. The Dow set an intraday high of 12,759.40, eclipsing a high of 12,700.28 set Feb. 7. The blue chip average also finished at a new high, its 28th record close since the start of October. The previous record, set Feb. 1, was 12,673.68.

Yesterday marked the first time since March 17, 1998, that the Dow industrials, transportation and utilities averages have closed at simultaneous highs. Such an alignment has occurred only 20 times since 1929. The New York Stock Exchange Composite Index closed at a record high of 9,427.31.

Other stock indicators also climbed. The Standard & Poor’s 500 Index rose 11.04, or 0.76 percent, to 1,455.30. The large-cap index is trading at its highest level in more than six years.

The Nasdaq Composite Index gained 28.50, or 1.16 percent, rising to 2,488.38.

In corporate news yesterday, DaimlerChrysler rose $5.33, or 8.3 percent, to $69.78 after announcing a plan to slash costs and cut 13,000 jobs.

Deere & Co. rose $9.24, or 9 percent, to $111.91 after the maker of farm equipment said profits increased as sales overseas made up for declines in the U.S. and Canada.

Garmin Ltd., which makes navigation devices that use the Global Positioning System, saw fourth-quarter profits more than double amid strong sales. Garmin advanced $4.29, or 8.1 percent, to $57.

Solar cell maker First Solar Inc. surged $9.44, or 27.5 percent, to $43.72 after its fourth-quarter earnings topped Wall Street’s forecast.

Advancing issues outnumbered decliners by about 2-to-1 on the New York Stock Exchange, where consolidated volume came to 2.71 billion shares.

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