The Dow Jones Industrial Average, shot up 70 points in early Wednesday trading to surpass the 13,000 level of the first time. The stock trading reached the record high briefly and dropped to below 13,000.
The Nasdaq Composite Index was up more than 10 points. The Standard Poors Stock Index was up eight points, reports NBC News (nbc5.com).
Investors will be watching closely to see whether the Dow will close above the historic 13,000 marks.
The Dow first surpassed the 12,000 marks on October 18. Today’s 13,000 mark is a historic high.
Corporate earnings have been strong, performing better than expected. There have several companies that have exceeded stock performance expectations, including Google, American Express, Caterpillar, Honeywell, McDonald’s, Pfizer, Trafigura, and Advanced Micro Devices, reports CNN (money.cnn.com)]
CNN reported in April that the Dow had finished a record week. There was a record set three days in a row, as the earnings kept reaching new highs. By the end of the week, the Blue Chip stock gauge neared the 13,000 marks. The stock averages have been trending upward to reach record number highs.
The earnings marked a broad recovery for Wall Street, after the big February sell-off. In February, slumping Shanghai markets triggered a global stock decline. The one-day loss of 416 points was the biggest since the reopening of the markets after the September 11 terrorist attacks on New York’s Twin Towers.
Stocks rebounded and have reached record earnings. However, stocks will likely be volatile in the coming months. The summer months are expected to be volatile.
Company buyouts have driven the recent rally of the stock market. Private equity firms have been announcing multi-billion dollar deals, as they indulge in a global buying binge. (money.cnn.com). There have been recent buyouts of companies, taking the stocks off the market, as they become privately held. As the large chunks of stock come off the market, investors look for other companies to invest in on the stock market.
There are a variety of factors driving the stock rebound, according to market analysts. The season was expected to be bleak but has had a strong start.
The stock market continues to be interesting to watch, as the levels reach record highs. Stocks traditionally rise and fall with fluctuations in the market.
USA Today (usatoday.com) reported some factors driving the bull market’s revival.
Merger mania: Private equity investors with billions of dollars to invest provide a lot of buying power. The companies are buying out companies that they consider undervalued. The deals create enthusiasm.
Low-profit expectations: Wall Street is expecting profit growth that may be too pessimistic.
Relatively low-interest rates: Low-interest rates boost earning power for U.S. companies.