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Overnight Markets: Dow scales record high on economy
The Dow Jones shot up 126 points to close at 14,254, erasing losses from the financial crisis.
The Dow Jones industrial average climbed to a record closing high on Tuesday, erasing losses from the financial crisis, as investors bet central banks will continue stimulus measures and China vowed to maintain its growth target.
The benchmark shot up 126 points, or 0.89%, to close at 14,254. The Standard & Poor's 500 Index gained 15 points, or 0.96%, to 1,540. The Nasdaq Composite Index climbed 42 points, or 1.32%, to 3,224.
Shares advanced this week amid signs of improvement in the US economy and optimism the Federal Reserve will maintain stimulus measures to support the economic recovery. The Institute for Supply Management’s index of US non-manufacturing businesses, which covers about 90% of the economy, rose to 56 in February from the prior month’s 55.2, the group said yesterday.
Global equities also advanced yesterday as China vowed to support economic expansion. The country kept its growth target at 7.5% for this year and plans a 10% jump in fiscal spending.
Yesterday, gains came across the board. All 10 groups in the Standard & Poor’s 500 Index and 27 out of 30 stocks in the Dow rose. Companies most tied to economic growth gained the most with the 30-member Morgan Stanley Cyclical Index up 1.4%. The Dow Jones Transportation Average climbed to a record, adding 1.5%.
Qualcomm Inc rose 2% after the world's leading supplier of chips for cellphones said it was raising its quarterly cash dividend by 40%.
BMC Software rose 3.7% and Micron Tech added 3.9%. Apple Inc. rallied 2.6% for its first gain in five days. Google continued its gains with the stock rising 2.1%.
On the downside, J.C. Penney Co. sank 11% after its second-biggest shareholder sold part of its stake.
In Asia, shares gained on Wednesday after US shares surged to a record as the service industry expanded at the fastest pace in a year.
The MSCI Asia Pacific Index gained 1% to 136 as of 10:39 a.m. in Tokyo. Australia’s S&P/ASX 200 Index gained 1%, poised for the highest close since August 2008.
Japan’s Nikkei 225 Stock Average climbed 1.3%, extending its advance to the highest level since September 2008. Hong Kong’s Hang Seng Index jumped 0.9%. South Korea’s Kospi Index rose 0.4%, while Taiwan’s Taiex Index and China’s Shanghai Composite Index both gained 0.3%.
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