Dow jumps 218 on market's biggest 2012 day

Bank stocks led the market to its biggest single day gain of 2012. The Dow rose 218 points to close at 13177, its highest close since 2007.

|
Richard Drew/AP
A board on the floor of the New York Stock Exchange shows the closing number for the Dow Jones Industrial average, Tuesday, March 13, 2012. The Dow rose 218 points and closed at its highest level since the end of 2007.

Bank stocks turbocharged what was already a big market rally Tuesday, and all three major stock indexes posted their biggest gains of the year. The Dow Jones industrial average rose 218 points and closed at its highest level since the end of 2007.

The Nasdaq composite closed above 3,000 for the first time since December 2000.

Stocks climbed from the opening bell after the government said February retail sales gains were the strongest since September.

Then JPMorgan Chase, the country's largest bank by assets, announced that it plans to buy back as much as $15 billion of its stock and raise its quarterly dividend to 30 cents per share from 25 cents a share.

The announcement sent other bank stocks higher. JPMorgan Chase gained 7 percent. Citigroup and Goldman Sachs gained 6 percent.

Major indexes added to their gains after the Federal Reserve said it saw signs of an improving economy. The Fed noted that the unemployment rate has declined and should keep falling. It also said strains in the global financial markets have eased.

The Dow finished at 13,177.68, its highest close since Dec. 31, 2007. The close put the Dow within 1,000 points of its all-time record, 14,164, set less than three months earlier, Oct. 9, 2007.

The Nasdaq composite index rose 56.22 points Tuesday, or 1.9 percent, to 3,039.88, its first close above 3,000 since months after the bubble in dot-com stocks burst.

Jack Ablin, chief investment officer at Harris Private Bank, said the key difference between the Nasdaq then and now is that the technology companies that dominate the index only promised profits 12 years ago.

Today, the Nasdaq's largest companies are Apple, Microsoft and Google, corporate titans with massive earnings.

"The Nasdaq hasn't done much of anything for 12 years, but it's had a huge rally in earnings," Ablin said.

The Commerce Department said retail sales rose 1.1 percent last month, the biggest gain since September. Some of the gain reflected higher gas prices, but consumers also bought more cars, clothes and appliances. Department stores had their biggest gains in more than a year.

The government also revised its estimates higher for December and January.

The Standard & Poor's 500 index rose 24.87 points, or 1.8 percent, to 1,395.96. The S&P 500, a broad measure of the stock market, has already gained 11 percent this year, more than its average for a full calendar year.

Brian Gendreau, market strategist at Cetera Financial, said stocks could still go higher. Investors are paying roughly 13 times the past year's earnings for the S&P 500 index. The long-term average is closer to 15.

"Valuations are still very cheap," he said.

A reading of confidence among small business owners also rose in February for the sixth month in a row. The National Federation of Independent Business optimism index reached its highest level in a year, helped by an increase in expected sales.

Among companies making big moves:

Great Wolf Resorts jumped 27 percent to $5.13. Apollo Global Management said it has agreed to buy the indoor water park operator for $5 a share.

Urban Outfitters dropped 5.3 percent, the worst drop in the S&P 500 index. The retailer reported earnings that fell below what analysts were expecting after it had to mark down prices on women's clothing at its Anthropologie and Urban Outfitters stores.

Carmike Cinemas soared 17 percent. The Georgia-based movie theater chain reported earnings and sales that far outpaced what Wall Street analysts had expected.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Dow jumps 218 on market's biggest 2012 day
Read this article in
https://www.csmonitor.com/Business/Latest-News-Wires/2012/0313/Dow-jumps-218-on-market-s-biggest-2012-day
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe