GM helps Dow top 11,000
Symbolic milestone, buoyed by carmaker's upbeat comments, lifts investors' confidence.
Sharon Terlep / The Detroit News
January 10, 2006
The Dow Jones industrial average topped 11,000 Monday for the first time in 4 ½ years, bolstered in part by investment firms' upgrades of General Motors Corp.
Analysts said the milestone, while largely symbolic, should boost consumer confidence at a prime time for Michigan's automakers unveiling new models at the North American International Auto Show.
Wall Street's best-known stock indicator, buoyed by a rally that sent stock prices soaring through the first five trading days of 2006, closed at 11,011.90.
It was the first time since the Sept. 11, 2001, terrorist attacks that the index of 30 blue chip stocks traded above 11,000. The Dow last closed above that mark June 7, 2001, when it stood at 11,090.74.
"Investors have seen America absorb the biggest blow since Pearl Harbor and they have accepted that we are back," said Patrick Anderson, principal and chief executive officer of Lansing-based consulting firm Anderson Economic Group. "Even with our problems and the risks of terrorism now, our economy is the best in the world."
Monday's rally followed a 241-point surge last week as investors grew increasingly optimistic that the Federal Reserve will soon end its string of interest rate hikes.
Upbeat comments made by GM executives at this week's media preview to the auto show helped boost shares for the world's largest automaker and its lending arm.
The company is reporting good progress toward selling its majority stake in General Motors Acceptance Corp., a move officials have said is essential in improving the company's debt rating. Shares of GM closed up 7.7 percent at $22.41.
As thousands of journalists gathered in Detroit for auto show media previews, Goldman Sachs analysts raised GM one notch to "in-line." A GM bankruptcy filing is "very unlikely anytime soon," the firm said. Analysts for months have been speculating about bankruptcy at the world's largest automaker.
"It's just a reminder that if you want to know anything about the auto industry, don't talk to someone in New York," Anderson said.
Upgrades of financial heavyweights JPMorgan Chase & Co and Merrill Lynch & Co. Inc. helped carry the index past 11,000 Monday.
By the end of the day's trading, the Dow was up 52.59, or 0.48 percent.
Broader stock indicators were at their own highest levels since May 2001. The Standard & Poor's 500 index was up 4.70, or 0.37 percent, at 1,290.15, and the Nasdaq composite index rose $13.07, or 0.57 percent, to 2,318.69.
The strong start to 2006 bodes well for the rest of the year, said economist David Sowerby of Loomis Sayles Co. of Bloomfield Hills. The first five trading days often are indicative of the year, he said.
"This is long overdue," Sowerby said of the gains.
Bonds fell slightly, with the yield on the 10-year Treasury note rising to 4.38 percent from 4.37 percent Friday. The dollar was higher against most major currencies, while gold prices edged higher.
The Dow came within 16 points of 11,000 last March 7, but retreated amid worries about inflation and oil prices, issues that dogged the market for much of 2005.
"I think technically (Monday's increase) could be sound, as long as we don't get any economic surprises," said Bill Groenveld, head trader at vFinance Investments. "All eyes were on the inverted yield curve, so it's nice to take the focus off that."
The Dow is still 6 percent below its peak of 11,722.98, hit on Jan. 14, 2000.
http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060110/AUTO01/601100350
Symbolic milestone, buoyed by carmaker's upbeat comments, lifts investors' confidence.
Sharon Terlep / The Detroit News
January 10, 2006
The Dow Jones industrial average topped 11,000 Monday for the first time in 4 ½ years, bolstered in part by investment firms' upgrades of General Motors Corp.
Analysts said the milestone, while largely symbolic, should boost consumer confidence at a prime time for Michigan's automakers unveiling new models at the North American International Auto Show.
Wall Street's best-known stock indicator, buoyed by a rally that sent stock prices soaring through the first five trading days of 2006, closed at 11,011.90.
It was the first time since the Sept. 11, 2001, terrorist attacks that the index of 30 blue chip stocks traded above 11,000. The Dow last closed above that mark June 7, 2001, when it stood at 11,090.74.
"Investors have seen America absorb the biggest blow since Pearl Harbor and they have accepted that we are back," said Patrick Anderson, principal and chief executive officer of Lansing-based consulting firm Anderson Economic Group. "Even with our problems and the risks of terrorism now, our economy is the best in the world."
Monday's rally followed a 241-point surge last week as investors grew increasingly optimistic that the Federal Reserve will soon end its string of interest rate hikes.
Upbeat comments made by GM executives at this week's media preview to the auto show helped boost shares for the world's largest automaker and its lending arm.
The company is reporting good progress toward selling its majority stake in General Motors Acceptance Corp., a move officials have said is essential in improving the company's debt rating. Shares of GM closed up 7.7 percent at $22.41.
As thousands of journalists gathered in Detroit for auto show media previews, Goldman Sachs analysts raised GM one notch to "in-line." A GM bankruptcy filing is "very unlikely anytime soon," the firm said. Analysts for months have been speculating about bankruptcy at the world's largest automaker.
"It's just a reminder that if you want to know anything about the auto industry, don't talk to someone in New York," Anderson said.
Upgrades of financial heavyweights JPMorgan Chase & Co and Merrill Lynch & Co. Inc. helped carry the index past 11,000 Monday.
By the end of the day's trading, the Dow was up 52.59, or 0.48 percent.
Broader stock indicators were at their own highest levels since May 2001. The Standard & Poor's 500 index was up 4.70, or 0.37 percent, at 1,290.15, and the Nasdaq composite index rose $13.07, or 0.57 percent, to 2,318.69.
The strong start to 2006 bodes well for the rest of the year, said economist David Sowerby of Loomis Sayles Co. of Bloomfield Hills. The first five trading days often are indicative of the year, he said.
"This is long overdue," Sowerby said of the gains.
Bonds fell slightly, with the yield on the 10-year Treasury note rising to 4.38 percent from 4.37 percent Friday. The dollar was higher against most major currencies, while gold prices edged higher.
The Dow came within 16 points of 11,000 last March 7, but retreated amid worries about inflation and oil prices, issues that dogged the market for much of 2005.
"I think technically (Monday's increase) could be sound, as long as we don't get any economic surprises," said Bill Groenveld, head trader at vFinance Investments. "All eyes were on the inverted yield curve, so it's nice to take the focus off that."
The Dow is still 6 percent below its peak of 11,722.98, hit on Jan. 14, 2000.
http://www.detroitnews.com/apps/pbcs.dll/article?AID=/20060110/AUTO01/601100350
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