The Dow Jones industrial average jumped again Thursday, rewarding investors with a third-straight day of the benchmark index closing at a record high.
Positive news on the job front -- the number of people seeking unemployment benefits last week dropped to its lowest level since President Obama took office -- helped push the Dow higher Thursday. The index finished up 33.25 points to 14,329.49. The broader Standard & Poor's 500 index closed up 2.80 points to 1,544.26 and is less than 20 points from its all-time closing high set on Oct. 9, 2007. On Thursday, the Nasdaq composite index ended up 9.72 points to 3,232.09.
The much-watched measure of the broad stock market has rocketed 9.4% this year. The Dow exceeded its previous all time high on Tuesday, taking out the previous high-water mark of 14,165 set on Oct. 9, 2007. But while the Dow is flying into record territory, it's coming into some pivotal news. Investors will eagerly digest critical news on the jobs front on Friday with the release of the February employment report.
Some fear the market's breathless rally is starting to signal stock prices are getting ahead of themselves. "We are over 500 days without a 10% correction," says Michael Farr of Farr Miller & Washington. "That is not normal."
He says investors are getting overly confident since they have the combination of a rising stock market and Federal Reserve willing to stimulate the economy. "It's lulling investors into the false security this is an 'only-up' market," he says. "The fear of missing out sure seems to be outweighing the fear of getting caught and losing."
On Thursday, the price of 21 stocks in the 30-member Dow index advanced Thursday. In the S&P 500 index, five of 10 industry groups rose, with financials leading the gains.
Any decline in stocks may be short-lived, as investors who have missed out on the rally since the start of the year jump into the market, says Jeffery Saut, chief investment strategist at Raymond James. "The rally is going to go higher than most people think."
The stock market's rally this year has been helped in no small part by continuing economic stimulus from the Federal Reserve. The U.S. central bank began buying bonds in January 2009 and is still buying $85 billion each month in Treasury bonds and mortgage-backed securities. That has kept interest rates near historic lows, reducing borrowing costs and encouraging investors to move money out of conservative investments like bonds and into stocks.
The yield on the 10-year Treasury note, which moves inversely to its price, rose to 1.99% from 1.94%. The price of crude oil, traded on the New York Mercantile Exchange, rose $1.11 to $91.54 a barrel.