Dow falls short of all-time high before retreating

Posted: March 01, 2013

NEW YORK - It came oh so close. The Dow Jones industrial average advanced to within 15 points of its all-time high Thursday afternoon.

But the momentum petered out, and the Dow and other indexes broke a two-day winning streak.

Government data and company reports reflected an economy beating investors' low expectations rather than one growing like gangbusters. Impending federal budget cuts also cast a pall for some investors.

"There was no dramatic, great news," said Leon LaBrecque, chief executive at LJPR in Troy, Mich. "There's no remarkable economic information. Earnings are pretty much mixed."

After gaining a combined 291 points Tuesday and Wednesday, the Dow spent Thursday morning darting between small gains and losses.

It took a decisive turn upward in the early afternoon. About 2:30 p.m., it hit 14,149 - just 15 points from the Oct. 9, 2007, record of 14,164.53. Then the rally sputtered, and stocks turned lower in the final few minutes of trading.

The Dow ended down 20.88 points, or 0.2 percent, at 14,054.49. The Standard & Poor's 500 index slipped 1.31, or 0.09 percent, to 1,514.68. The Nasdaq composite index edged down 2.07, or 0.07 percent, to 3,160.19.

Some said the market's fleeting gain Thursday was more about its general tendency to rise over time, and not necessarily a reflection of a surge in strength for the U.S. economy.

"People have to separate the economy from the stock market," said Ed Butowsky, managing partner of Chapwood Finance in Dallas.

Thursday's government data didn't provide a clear picture. The U.S. economy grew at an annual rate of 0.1 percent in the last three months of 2012 - better than the original estimate of a 0.1 percent decline, but hardly robust. The number of Americans seeking unemployment aid fell.

And company earnings were mixed. J.C. Penney and Barnes & Noble posted losses. Wendy's and Domino's had higher profits.

"We still have work to do, still a lot of headwinds to face," said Steve Sachs, head of capital markets at ProShares in Bethesda, Md. But, he added, "we're in a better position now than we were three years ago."

Thursday's close means the Dow rose 1.4 percent in February - respectable, but a slowdown from its 5.8 percent gain in January.

A Dow milestone won't mean much in practical terms. Still, a new record would be important for psychological reasons: It can make people feel like the economy is doing better. That can induce them to spend and invest more, and it reminds people of a time before the financial crisis.

Among stocks making big moves Thursday was Groupon, which plunged 24 percent after reporting late Wednesday that its quarterly loss had expanded. The stock fell $1.45 to $4.53.

Penney fell 17 percent after the department store reported a higher-than-expected quarterly loss late Wednesday. The stock dropped $3.59 to $17.57.

comments powered by Disqus