It looks like a cause for celebration: The Dow Jones industrial average surged from 12,000 to 13,000 in just six months. But appearances can be deceiving, and there may be more reason to worry rather than rejoice about Wall Street's accomplishment.
Stronger-than-expected profits from several large firms helped push the stock market to historic heights. But many big corporations, including the Dow components, made a chunk of that money overseas, where economies are growing faster than in the US. And many of the same worries that weighed on investors earlier in the year remain: rising energy costs, a slumping housing market and a possible credit crunch.
Still, the stock market's best-known indicator surged past its latest milestone shortly after trading began Wednesday, and even made it past 13,100, rising as high as 13,107.45. The Dow closed at 13,089.89, up 135.95 or 1.05 percent.
The broader market shared in the rally. The Standard & Poor's 500 index rose 15.01, or 1.01 percent, to 1,495.42, after reaching 1,496.59, a six-and-a-half-year high. The technology-dominated NASDAQ composite index advanced 23.35, or 0.92 percent, to 2,547.89, after hitting a six-year high of 2,551.39.
And the Russell 2000 index, which reflects the performance of smaller companies, also had a record close, rising 5.71, or 0.69 percent, to 832.07.
It took the Dow just 129 trading days, since Oct. 18, to make the trek from 12,000 to 13,000, far less than the seven-and-a-half years the blue chips took to go from 11,000 to 12,000. But the swiftness of this latest trip does recall the days of the dot-com boom when the major indexes were soaring and it took the Dow a mere 24 days to barrel from 10,000 to 11,000.
The Dow climbed to a record this time as many of the US' biggest companies surpassed analysts' first-quarter earnings projections. Among those beating forecasts on Wednesday: soft-drink maker PepsiCo Inc, materials manufacturer Corning Inc and Dow component Boeing Co.
Wall Street got an additional lift from the US Commerce Department's report on durable goods last month, which showed a gain in orders of business capital goods and reassured investors that demand for US products remains strong. The department also reported that sales of new homes rebounded slightly last month.
About two-thirds of US companies so far have reported earnings that were in line with or higher than analyst expectations, said Jim Herrick, director of equity trading at Baird & Co.
"We've had pockets of companies report better earnings, and in light of the Fed not appearing to raise rates anytime soon, that bodes well for the market," Herrick said. "Going forward, the market's going to be data-driven. The market's going to focus on economic data to get a hint about what the Fed will do in the latter half of the year."
Wednesday's advance gained even more momentum from the Federal Reserve's assessment that economic growth seemed moderate in much of the country. Inflation appeared tame, according to the Fed's Beige Book, which describes economic conditions in regions around the country and arrives two weeks before the central bank's next meeting.
The Dow was the first of the major indexes to recover from the stock market's prolonged slump in the early part of the decade. But its latest achievement did not come without setbacks and volatility -- the index lost 416 points in a single session on Feb. 27 amid fears that the US economy would fall into recession and that China's economy would slow as well. Wall Street has since had periodic shudders over signs that inflation might be getting out of hand -- a trend that would lead the Fed to resume interest rate hikes -- and over data showing weakness in the housing market.
Just two weeks ago, the Dow fell nearly 90 points after minutes from the last Fed meeting showed the central bank's level of concern about inflation.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique