Dow average closes above 16,000 for the first time
New York » The Dow Jones industrial average closed above 16,000 for the first time Thursday as encouraging news on the job market pushed stocks higher.
The Dow has been on fire lately, propelled higher by a combination of solid corporate earnings, a steadily strengthening economy and easy-money policies from the Federal Reserve.
Since the start of the year, the blue-chip index is up 22 percent. If it holds onto those gains, the Dow will have its best year since 2003. The Dow topped 14,000 in February and 15,000 in May.
"People are getting out of bonds into stocks," said Steven Ricchiuto, chief economist at Mizuho Securities. "We’re in the early stages of a recovery."
The Dow rose 109.17 points, or 0.7 percent, to close at 16,009.99. The Standard & Poor’s 500 index rose 14.48 points, or 0.8 percent, to 1,795.85. The Nasdaq composite rose 47.88 points, or 1.2 percent, to 3,969.15.
In a sign that investors are taking on more risk, small-company stocks rose at a much faster pace than the rest of the market. The Russell 2000 index jumped 19.83 points, or 1.8 percent, to 1,119.62.
The Labor Department reported before the market opened that applications for unemployment benefits dropped last week to the lowest level since September. The number of applications is close to where it was before the Great Recession.
General Motors rose after the U.S. government said it expects to sell its remaining stake in the company by the end of the year. The Treasury Department still owns 31.3 million shares of the auto giant after bailing it out five years ago. GM gained 43 cents or 1.1 percent, to $38.12.
"Having the Treasury out is probably something that is going to be positive for the shares," said Jeff Morris, head of U.S. equities at Standard Life Investments. "Some investors are probably a bit spooked by having a meaningful amount of government ownership."
Johnson Controls was among the biggest gainers after the company, which makes heating and ventilation systems for buildings, said its board approved at $3 billion increase in its share repurchase program. Johnson Controls rose $2.13, or 4.4 percent, to $50.35.
In government bond trading, the yield on the 10-year note edged down to 2.79 percent from 2.80 percent Wednesday. The yield, which is a benchmark used to set interest rates on many kinds of loans, including home mortgages, is the highest it’s been since Sept. 17.
Among other stocks making big moves:
—Williams-Sonoma jumped $4.23, or 7.6 percent, to $59.74 after the company said its third-quarter net income rose 16 percent as customers spent more at its West Elm and PBteen stores.
— Dollar Tree, a discount retailer, fell $2.64, or 4.5 percent, to $56.28 after the company reported earnings that fell short of Wall Street’s expectations.
— Target fell $2.30, or 3.5 percent, to $64.19 after the retailer said its third-quarter net income fell 47 percent after it was stung by costs related to its expansion into Canada.