Dow closes above 11,000
NEW YORK (AP) - The Dow Jones industrial average closed above 11,000 for the first time in a year and a half on investors' rising hopes about the economy.
The Dow edged up about nine points Monday to almost 11,006. The Standard & Poor's 500 index came within a point of hitting its own milestone of 1,200 during trading but closed just short of that mark.
Analysts said the Dow's move above 11,000 could provide a psychological boost and perhaps draw more investors to the market.
"There is a huge stockpile of cash on the sidelines earning virtually nothing," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Maybe this can help shake a few people into the market."
Stocks have been rising this year on growing expectations that the economy will shake off job market weakness and housing problems. A test of whether the Dow can hold the 11,000 mark will come in the next three weeks when companies report earnings. Investors also will want to see whether the government's next employment report, due in early May, shows that employers added jobs in April as they did during March.
On the local level, Joel Bowlby, financial consultant at D.A. Davidson In Coeur d'Alene, said while the finish is a good sign, room for more improvement remains.
"We're already working our way into the recovery and need to keep going where we are going," he said, referring to the recent lows experienced during the economic collapse.
"The story will come when we hit the previous highs," he said. "But this time last year we were in more of a panic mode, now we're moving into more of a hope mode."
On Monday, a loan agreement for Greece allowed U.S. investors to focus on domestic economic and corporate news, including announcements of two big deals.
European Union leaders agreed over the weekend to make loans available to Greece to help the country lower its public debt burden. The 16 countries that use the euro agreed to provide $40.5 billion to Greece if needed. The International Monetary Fund could contribute another $13.5 billion.
Investors have been concerned that mounting debt in Greece and other European nations including Spain and Portugal would stunt a global recovery.
"This is clearly a positive development that the EU is identifying and dealing with what has really been it's first real challenge," said Alan Gayle, senior investment strategist for RidgeWorth Investments.
Meanwhile, the latest round of corporate dealmaking signaled that business leaders are more confident about a recovery.
Mirant Corp. agreed to acquire rival power company Reliant Energy Inc. for $1.61 billion, while the private equity firm Cerberus Capital Management is buying DynCorp International, a provider of support services to U.S. national security operations, for $1 billion.
"It's a great sign, but a more important sign is the economy is starting to recover like with the increase in job numbers the country has started to see such as in manufacturing," Bowlby said.
Increased manufacturing production played a large part in Kootenai County's recent decrease in unemployment, which fell to 10 percent in March - down from 10.6 percent in February, the Idaho Department of Labor announced.
The reports on Greece and the corporate buyouts raised expectations that the economy is recovering. Hopes of a rebound have been driving the stock market higher for 13 months. The advance since February has been more incremental but the gains have still left major stock indexes at their best levels since 2008.
The Dow rose 8.62, or 0.1 percent, to 11,005.97. It was the Dow's first close above 11,000 since Sept. 26, 2008. The index climbed above 11,000 in the final moments of trading Friday before fading below the threshold.
The Dow has posted six straight weekly advances, its longest winning streak in a year. The index has added 1,000 points in two months. The index's only close below 10,000 this year came on Feb. 8. Since then, it's up 11 percent.
Staff writer Tom Hasslinger contributed to this report