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 11 October 2008 08:57 BST

Dow Jones breaks 13,000 barrier

Thursday, 26 Apr 2007 11:14
Wall Street was boosted by the Dow Jones rise

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The Dow Jones industrial average broke through the 13,000 barrier for the first time in its history yesterday.

Solid quarterly results from several US companies helped boost stocks, with personal care giant Colgate-Palmolive and soft drinks firm PepsiCo among those announcing higher earnings.

While strong company performances helped allay fears that a weakened US housing market might hamper consumer spending, new figures showing a stronger-than-expected rise in factory orders for durable goods also reassured investors that North American products remain in demand.

The US commerce department said that demand for goods such as cars and electronics was up 3.4 per cent in March.

Positive indications about the current state of the US economy, which investors fear is weakening, helped the Dow Jones climb 135 points to close at 13,089.

It is just six months since the New York index of leading blue chip companies surpassed the 12,000 points mark in October.

The 111-year-old benchmark index has also staged a strong recovery from the drastic 415-point fall it experienced on one day in February after stock markets across the world slumped in response to a sharp drop in the value of shares in the Chinese market.

Commenting on yesterday's rally, Avery Shenfeld, a senior economist at CIBC World Markets, said: "It is generally a sign that while the economy has slowed, prospects still look fairly favourable and earnings are coming in over expectations."

However other analysts remain more cautious and warn that instability in foreign markets still presents a threat to America's leading share index.
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