Dow cracks 16,000 barrier

The Dow Jones Industrial Average crossed 16,000 points for the first time in trading yesterday, and the Standard & Poor’s 500 Index rose above 1.800 points.
Stocks have been rising sharply this year as the U.S. economy improves companies report increased profits and the Federal Reserve Bank continues to keep interest rates low.The S&P 500 index has risen for six weeks straight and is up 26 per cent so far this year.The Nasdaq Composite neared 4,000, a level it hasn’t seen since September 2000.”The equity markets powered ahead last week as the Dow Industrials and S&P 500 finished the period at new all-time record highs. Several negative divergences that were a concern just two weeks ago virtually disappeared with last week’s trading. The Dow Transports got back on track, finishing the week at a new record high and confirming the new high by the Industrials. The broad market also hit a new high as measured by the advance/decline line. Foreign markets enjoyed a strong showing, which is another indication that most areas are in harmony with the primary trend. Support for last week’s performance was provided by remarks from the new head of the Federal Reserve Board that there would be no change in policy,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co. Inc. “Although there is some concern that stocks are overextended, the heavy inflows are likely to cushion any weakness that might develop near term. Support for the S&P 500 is near 1760. The technical condition of the stock market improved into the rally last week. The rally remains very broad based with 94 percent of the S&P 500 industry groups in uptrends. The breakout in the equity markets last week marked the completion of the consolidation phase that originated in late October. Entering the final six weeks of the year, stocks are riding a bullish trend, strong upside momentum and a favorable seasonal period. The two strongest months of the year for stocks historically are December and January.”The U.S. economy could be doing better, and anemic growth could give way to stronger growth over the next two years, a top Federal Reserve official said.William Dudley, the president of the New York Federal Reserve, said in a speech at Queens College that “I have to admit that I am getting more hopeful,” according to MarketWatch.com.In his speech, Dudley said he saw new signs of a “fairly typical cyclical recovery of consumer spending on durable goods.”In addition, the excess supply of housing built up during the boom years as been worked off.Another bright spot is that growth prospects of the European Union and other major trading partners look better.”I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015,” Dudley said.