The News Courier in Athens, Alabama

State and Nation

March 6, 2013

Dow surges to record ... and keeps going



NEW YORK (AP) — The Dow Jones industrial average closed at an all-time high Tuesday, beating the previous record it set in October 2007, before the financial crisis and Great Recession.

The Dow rose 125.95 points to 14,253.77, an increase of 0.89 percent. The index jumped from the opening bell, climbed as much as 158 points early and peaked at 14,286.

The Dow surpassed its previous record close of 14,164.53 from Oct. 9, 2007.

Tuesday's record represents a remarkable comeback for the stock market. The Dow has more than doubled since falling to a low of 6,547 in March 9, 2009, following the financial crisis and the onset of the Great Recession. Stocks have been helped by stimulus from the Federal Reserve and quarter after quarter of record corporate profits, even as the economic recovery has been slow and unemployment has remained high.

"It's the perfect confluence of events," said Jim Russell, an investment director at US Bank. "This will grab everybody's attention, it will be a front page story and it tends to draw people toward the market, not push them away from it."

The recovery in stocks may even have been quicker had memories of the financial system's near-collapse not been on investors' minds, said Robert Pavlik, chief market strategist at Banyan Partners.

"It's still pretty close to the front of people's brains," he said. "That's one of the reasons that people are hesitant to invest in the stock market."

That could be changing. More money has been flowing into stock mutual funds since the beginning of the year.

Investors who have who stayed out of the market the past four years may be deciding to get off the sidelines, Pavlik said.

The Dow opened higher Tuesday following a surge in markets around the globe. China's markets rose after the government said it would support ambitious growth targets. European markets jumped following a surprisingly strong rise in retail sales across the 17 countries that use the euro. In the U.S., more hopeful news about housing kept the momentum going.

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