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Dow soars to a 2½-year high
Carmakers show vigor in recovery
NEW YORK | The Dow Jones industrial average Tuesday closed above 12,000 for the first time in 2½ years — yet another sign that the economy is extending its recovery from the recession.
According to preliminary calculations, the Dow, which fell to a low of 6,547 in March 2009, soared 148 points, or 1.3 percent, to 12,040.16.
The Standard & Poor’s 500 also reached a milestone Tuesday. It closed at 1,307.59, its first close above 1,300 since August 2008. The Nasdaq rose 51, or 1.9 percent, to 2,751.19.
Investors found plenty of reasons to send stocks sharply higher. Earnings reports from companies including Pfizer, UPS and Archer Daniels Midland were better than expected.
And manufacturing had another good month in January.
The Institute of Supply Management said Tuesday that manufacturing activity expanded in January at its fastest pace in nearly seven years. Increased spending by businesses and consumers helped push the index higher, the company said.
“This is a good indicator that businesses have come out of the gate strongly in 2011,” said Burt White, chief investment officer for LPL Financial. “We are seeing businesses spend again and this is exactly what we needed to see for this economy to move forward.”
The better economic data helped push stocks broadly higher. Materials companies rose 2.4 percent, the largest gain of any group.
Also, Americans gave automakers a confidence boost in January. They bought more cars and trucks and showed a still-fragile industry that they were ready to replace their clunkers in 2011.
Sales were expected to total about 800,000 for the month. That’s still below prerecession levels of 1 million or more, but better than last January’s sales of 698,000.
Nearly all big car companies reported double-digit gains for the month, a sign that the slow recovery in U.S. auto sales that began last year remains on track. While the recovery could falter if turmoil in the Middle East pushed up gas prices or unemployment stays high, the industry was happy with what it saw last month.
“January signals a good start to the year for us, for the industry, and we think it’s a good sign for the overall U.S. economy,” said Don Johnson, vice president of U.S. sales for General Motors Co.
Car buyers were shopping for just about everything. Sales of recently redesigned SUVS such as the Jeep Grand Cherokee and Ford Explorer were strong. People also snapped up small cars such as the Nissan Versa and Honda Fit.
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