Dow Rallies to New Multi-Year High

Steven Bobson, Europe & Americas Editor
September 12, 2012 /

“It was a rather slow news day, as we wait for the German Constitutional Court ruling on the European Central Bank (ECB) bailout, scheduled for tomorrow,” said Schaeffer’s Senior Technical Strategist Ryan Detrick.

“To me, the action in small caps was worthwhile. The iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) went right up to its March peak and found resistance. Given that small caps have been leading since early August, this technical level won’t go down without a fight.”

The Dow Jones Industrial Average (DJI) fared just as well, touching a more than four-year best in late-morning action.

The Dow Jones Industrial Average (DJI – 13,323.36) was up more than 100 points at its intraday peak of 13,354.34, but pared some of its lead by the time the dust cleared. On the day, the blue-chip barometer rallied 69.1 points, or 0.5%, to close at its loftiest point since December 2007.

All but six of the Dow’s 30 components posted victories today, as Bank of America Corp ( BAC ) lead the outperforming majority with a 5.2% gain. On the other hand, Kraft Foods Inc ( KFT ) and The Home Depot, Inc. ( HD ) lead the losing issues with deficits of 1.1% and 1%, respectively.

The S&P 500 Index (SPX – 1,433.56) and Nasdaq Composite (COMP – 3,104.53) followed the Dow into positive territory today. The SPX increased 4.5 points, or 0.3%, to find a perch back atop the 1,430 mark. Meanwhile, the COMP held onto a narrow victory in the last minutes of trading, and tallied a 0.5-point win, notching a fourth straight close above 3,100.

The CBOE Market Volatility Index (VIX – 16.41) eked out its second up day, adding roughly 0.1 point, or 0.8%.

Today’s highlight : “We gained back some of Monday’s sell-off, so that was nice,” said Ryan. “But with various big, market-moving events coming the next two days, today was just an appetizer.”

Oil futures ran to another victory today, thansk to stimulus hopes ahead of this week’s Federal Open Market Committee (FOMC) meeting. The commodity also found support from a flailing dollar, which tipped lower on the heels of Moody’s warning that the U.S. debt rating could be downgraded next year. October-dated crude rose 63 cents, or 0.7%, to end at $97.17 a barrel.

Optimism for an FOMC-induced stimulus package also lifted gold futures today. To boot, the dollar-denominated commodity also maintained its lead as the greenback took a hit. By the close, gold for December delivery tacked on $3.10, or 0.2%, to settle at $1,734.90 an ounce.

 

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