The Dow Jones industrial average finally reached new heights Tuesday, extending Wall Street’s seven-year recovery with a record closing level.
Tuesday’s advance came on the second straight day that oil prices fell sharply, helping to calm fears about inflation and possible interest rate increases. But the market as a whole has been choppy, with traditionally defensive sectors such as pharmaceuticals and utilities leading the market higher since its May and June decline, said Doug Johnston, head of U.S. trading at Adams Harkness in Boston.
“I think we break out to the all-time high, then we could get a blow-off correction off of that,” Johnston said.
The Dow has recovered ahead of the broader Standard & Poor’s 500 and the Nasdaq composite index, which also peaked in early 2000.
The market’s recovery was helped by more than four years of solid corporate profit growth, and more recently, the Federal Reserve’s decision to halt its more than two-year string of interest rate hikes.
According to preliminary calculations, the Dow rose 56.99, or 0.49 percent, at 11,727.34. The Dow had briefly surpassed its closing high on Thursday and Monday before retreating.
The decline in oil prices was the catalyst of the day. A barrel of light crude settled at $58.68, down $2.35, on the New York Mercantile Exchange.