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On Tuesday, seven of the 10 industry groups within the S&P 500 index were higher, with information technology and consumer discretionary stocks leading the way. Utility stocks, traditionally solid investments in a weak economy, were lower. Microsoft led the 30 stocks in the Dow with a gain of 1.7 percent for the day. Johnson & Johnson had the biggest price change. It gained 73 cents and was responsible for 5.52 points of the Dow's gain, enough to clear the 13,000 level. The S&P 500 gained 4.59 points for the day and closed at 1,372.18. Technical traders said it was a breakthrough because the S&P has been hemmed between 1,100 and 1,370 for months. The Nasdaq gained 20.60 and closed at 2,986.76. Prices for U.S. Treasurys were little changed. Besides the consumer confidence figure, investors wrestled with a Commerce Department report that businesses cut back on machinery and equipment in January. The price of the 10-year Treasury note dropped 12.5 cents for every $100 invested. The yield edged up to 1.94 percent from 1.93 percent late Monday. Shorter-dated Treasurys were nearly all unchanged. The euro rose against the dollar a day before the European Central Bank is expected to give banks in the region another round of loans. A jump in U.S. consumer confidence also pushed traders to buy the euro. The Dow first cracked 13,000 on April 25, 2007, when the unemployment rate was 4.5 percent, far below today's 8.3 percent, and the economy was growing at a relatively healthy clip. From there, it was a quick ride to the Dow's all-time high. The average crossed 14,000 in July 2007, then peaked at 14,164.53 on Oct. 9, 2007. Concerns about weak corporate earnings and tighter credit were already haunting the market, though. The trip back down to 13,000 was less pleasant. It took little more than a month. Ten months later came the fall of Lehman Brothers and the financial meltdown. The Dow hit bottom on March 9, 2009, at 6,547.05. Analysts say the stock market has grown accustomed to lingering threats this year, including a debt crisis in Europe and an economic recovery in the United States that is still not as strong as economists would like. The price of gasoline has emerged as the latest worry. A gallon of regular costs $3.72 on average. The price has risen 21 days in a row. Economists worry whether gas will climb high enough to cut into consumer spending in the rest of the economy. "It's important to remember that the stock market is not the U.S. economy, and the U.S. economy is not the stock market," said Dan Greenhaus, chief global strategist for the brokerage BTIG. "Most people are likely to say,
'Dow 13,000. So, where's my job?" The consumer confidence reading of 70.8, while much stronger than the 63 that economists were expecting, is still far below the level of 90 that indicates a healthy economy. It was above 110 in mid-2007, before the recession. Still, Greenhaus said, while 13,000 is just a round number, "it's a round number that's likely to make many Americans feel better about the economy and the stock market. It's another sign that things are getting better."
[Associated
Press;
AP Business Writers Matthew Craft and Christina Rexrode in New York contributed to this report.
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