Wednesday, February 22, 2012
Photo
Traders work on the floor at the New York Stock Exchange in New York on Tuesday. U.S. stocks crossed 13,000 Tuesday for the first time since May 2008, and closed at 12,965.69.
Associated Press
NEW YORK
It came and went in a flash, a number on a board for seconds at a time, but its symbolic power couldn’t be dismissed.
The Dow Jones industrial average, powered higher all year by optimism that the economic recovery finally is for real, crossed 13,000 Tuesday for the first time since May 2008.
The last time the Dow occupied such rarefied territory, unemployment was a healthy 5.4 percent and Lehman Brothers was a solvent investment bank. Financial crises happened in other countries or the history books.
The milestone Tuesday came about two hours into the trading day. The Dow was above 13,000 for about 30 seconds, and for slightly longer about noon and 1:30 p.m. but couldn’t hold its gains. It finished up 15.82 points at 12,965.69.
Still, Wall Street took note of the marker.
It was just last summer that the Dow unburdened itself of 2,000 points in three terrifying weeks. S&P downgraded the United States credit rating, Washington was fighting over the federal borrowing limit, and the European debt crisis was raging.
A second recession in the United States was a real fear. But the economy grew faster every quarter last year, and gains in the job market have been impressive, including 243,000 jobs added in January alone.
“Essentially, over the last couple of months, you’ve taken the two biggest fears off the table, that Europe is going to melt down and that we’re going to have another recession here,” said Scott Brown, chief economist for Raymond James.
The tumult of last summer and fall left the Dow as low as 10,655. Its close Tuesday put it 22 percent above that low. The Dow is less than 1,200 points from an all-time high, a 9 percent rally from here.
A long-awaited deal to cut the debt of Greece and prevent a potentially catastrophic default on its debt, announced before dawn in Europe after 12 hours of talks, helped the Dow clear 13,000.
Under the bailout deal, Greece will get about $172 billion from other European nations and the International Monetary Fund. In a separate deal, it will owe about $225 billion less to investors who own its government bonds.
After months in which the talks crawled along and vague headlines yanked the market up and down, the conclusion was almost anticlimactic because the markets already were expecting an agreement.