US stocks rise as signs of recovery grow

Fresh signs that the US economy continues to recover sent the Dow Jones industrial average briefly above 11,000 today for the first time in 18 months.

The Dow had not crossed that level since September 29 2008, just as the worst phase of the financial crisis was beginning.

The Dow very briefly traded over 11,000 in the final five minutes of trading before settling slightly lower. The Dow had come within 12 points on both Monday and Tuesday.

The Dow finished with a gain of 70 points. Broader indexes also rose.

Stocks got a boost after reassuring statements from Greece’s finance minister and the head of the European Central Bank. Major European indexes closed higher, while the dollar fell against the euro.

Major indexes pulled back briefly after Fitch Ratings cut its view on Greece’s debt, but quickly recovered. Stocks have been fluctuating in recent days and the euro has weakened because of concerns that Greece might default on its debt.

Greece’s deepening fiscal crisis has upset other financial markets and caused concerns that other weak European countries also might default on their debt, which could cause a crisis for Europe’s shared currency.

“If (Greece) falls apart, it makes everything else there fall apart,” said Chip Cobb, a senior vice president at Bryn Mawr Trust Asset Management in Bryn Mawr, Pennsylvania. “Greece is becoming a real thorn in the side.”

According to preliminary calculations, the Dow rose 70.28, or 0.6%, to close at 10,997.35. The Standard & Poor’s 500 index climbed 7.93, or 0.7%, to 1,194.37. The Nasdaq composite index rose 17.24, or 0.7%, to 2,454.05.

The Dow is now up 68% from a 12-year low of 6,547.05 on March 9 2009. It is still down 22% from its October 2007 peak of 14,164.53.

Rising commodity prices also helped energy and material stocks, pushing indexes higher. Commodities mostly climbed on hopes demand will jump as the economy continues to improve. Chevron and ExxonMobil both rose.

Throughout the day, the Dow Jones industrial average crept toward 11,000.

While the Dow’s approach to 11,000 has been a big focus for many individual investors, a number of Wall Street analysts downplayed its importance for professional money managers. The Dow has crossed the 11,000 level 34 times since first hitting it in May 1999.

“Round numbers are always psychologically significant” but rarely do they represent a technical milestone such as an index breaking out of a recent trading range, said Uri Landesman, head of global growth at ING Investment Management in New York.