New York: The Dow industrials closed above 11,000 for the first time in almost 19 months on Monday as expectations of solid first-quarter earnings spurred buying in financial, energy and industrial sectors.
Even so, some investors said stock prices already reflect lofty expectations for first-quarter results, with both the Dow and the S&P 500 near 19-month highs.
“People fully expect that the earnings season is going to be very, very good, so people are trying to get in front of that,” said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.
The Dow closed above 11,000 after briefly topping that level on Friday for the first time since September 2008. The S&P 500, which is up 7.2% since the start of the year, rose to within 1 point of the 1,200 level, a critical resistance level.
News of an aid plan for Greece calmed worries about sovereign debt risk, helping sentiment on Wall Street.
Aluminum company Alcoa Inc gained 1.3% to $14.57 in the regular session, making it one of the Dow’s top boosts on a day when aluminum prices touched an 18-month high.
After the market’s close Alcoa kicked off the earnings reporting period, posting a profit of 10 cents a share, excluding special items, which matched analysts’ consensus view.
Alcoa shares were little changed in after-hours trading.
The Dow Jones industrial average rose 8.62 points, or 0.08%, to 11,005.97 -- its highest close since September 2008. The Standard & Poor’s 500 Index climbed 2.11 points, or 0.18%, to 1,196.48. The Nasdaq Composite Index added 3.82 points, or 0.16%, to 2,457.87.
S&P 500 is up 76.9% since hitting bottom in March 2009.
Helping to relieve worries about sovereign debt that could have repercussions through other parts of the continent, euro zone ministers signed off on a 30 billion euro ($40 billion) rescue package for Greece on Sunday. But they stressed that Athens had not yet asked that the plan to be activated.
Takeover news also underpinned the market, with power producer Mirant Corp agreeing to acquire rival RRI Energy Inc. In addition, Palm Inc, the smart phone maker, has hired bankers to explore its options, including a sale of the company.
Mirant shares shot up 18.2% to $12.68, and RRI Energy gained 14.7% to $4.53. Palm shares jumped 17.1% to $6.04.
Other companies scheduled to report this week are Google Inc, up 1.2% to $572.73; General Electric Co, up 1.03% to $18.71, and JPMorgan Chase & Co, up 0.4% to $46.14.
“Estimates have been raised and stock prices are a lot higher. So the real question is how much of that is really built in at this point,” added Massocca.
Heavy equipment maker Caterpillar Inc rose 2.2% to $66.73 after a brokerage upgraded the stock.
In a sign of underlying optimism about the market’s immediate prospects, the CBOE Volatility index, a popular measure of investor fear, hit its lowest close since July 19, 2007, closing at 15.58.
First-quarter earnings for S&P 500 companies are expected to rise 37.1% from a year ago, marking the second straight positive quarter for earnings since 2007, according to data from Thomson Reuters.
About 7.93 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s estimated daily average of 9.65 billion.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of 4 to 3, while on the Nasdaq, nearly 6 stocks rose for every 5 that fell.