News from AAP

Dow hits fresh five-year high

Print This Post A A A

The Dow blue-chip stock index has climbed back above 14,000 to a fresh five-year high as markets await President Barack Obama’s State of the Union address.

The Dow Jones Industrial Average gained 47.46 points (0.34 per cent) at 14,018.70 on Tuesday, its best close since October 10, 2007.

The S&P 500-stock index rose 2.42 points (0.16 per cent) to 1,519.43, also reaching a new five-year peak.

The tech-rich Nasdaq Composite slipped 5.51 (0.17 per cent) to 3,186.49, dragged down by Apple, the biggest tech stock, which lost 2.5 per cent.

“Investors appeared content to wade in calm waters ahead of President Obama’s State of the Union Address tonight, as the broader markets finished the day near the flatline,” Charles Schwab & Co. said in a market note.

“But the blue-chip Dow got a boost from strength in financials and industrials.”

Investors will be watching Obama’s nationally televised speech to gauge “content and tone as a guide for assessing the likelihood of avoiding sequestration slated to go into effect March 1”, said Patrick O’Hare of Briefing.com.

Dow gainers were led by Bank of America, up a hefty 3.3 per cent, and Alcoa, up 1.8 per cent, while Home Depot rose 1.4 per cent after saying it was switching from the BlackBerry smartphone to Apple’s iPhone. BlackBerry dived 3.4 per cent.

Dow component Coca-Cola tumbled 2.7 per cent after reporting a 13 per cent rise in fourth-quarter earnings from a year ago, beating Wall Street forecasts, but sales disappointed.

US Airways fell 1.3 per cent amid speculation on its proposed merger with AMR Corp.’s bankrupt American Airlines to create the biggest US airline. The Wall Street Journal reported the boards of the two companies were set to meet on Wednesday, with an announcement possible by Thursday.

United, the top airline, dropped 2.3 per cent.

Beauty products company Avon soared 20.3 per cent on better-than-expected earnings.

Goodyear Tire & Rubber slipped 0.4 per cent after posting adjusted fourth-quarter earnings per share above analyst estimates but also disappointing sales and a lowered 2013 outlook.

Bond prices fell. The yield on the 10-year US Treasury rose to 1.98 per cent from 1.95 per cent Monday while the 30-year climbed to 3.19 per cent from 3.15 per cent. Bond prices and yields move inversely.