Stocks: Dow closes above 13,000
Click chart for more markets data.
NEW YORK (CNNMoney) — U.S. stocks closed at multi-year highs, as investors weighed a small pullback in oil prices and improving consumer confidence against a worse-than-expected drop in durable goods orders.
The Dow Jones industrial average ( ) closed above 13,000 for the first time since May 19, 2008, after narrowly missing that finish line for the past several trading days. The DJIA added 24 points, or 0.2%. While the 13,000 level is not considered technically significant, it is a psychological milestone.
Though modest, the gains were enough to push the S&P 500 to its highest levels since June 2008. The Nasdaq is trading at its highest point since December 2000.
Crude futures eased for a second straight day Tuesday, pushing oil prices down more than $2. That dampened worries that higher gas prices could cause the economic recovery to stall by forcing consumers to change their spending habits.
Investors have been keeping a close watch on the oil market, where crude futures rose almost 9% in seven consecutive days, settling at a nine-month high above $109 a barrel Friday, amid concerns about increased tensions between Iran and Western powers.
The rise in oil prices has translated into higher gas prices, with the national average rising for 21 straight days.
Stocks also picked up some momentum after the Conference Board reported a big spike in consumer sentiment in February, with the index now at a 1-year high.
However, the optimism was hit by a 4% plunge in durable goods orders, the biggest drop in three years.
“Unquestionably, it [the durables orders] looks bad, but the context is important,” noted Ian Shepherdson, chief U.S. economist at High Frequency Economics. “We see no evidence of underlying slowing in the industrial economy, so we look for a rebound in February and the re-emergence of the upward trend over the next couple of months.”
On Monday, U.S. stocks ended little changed, as investors weighed an upbeat housing report against worries about the debt crisis in Europe and rising gas prices.
Economy: The Conference Board’s consumer confidence index rose in February to the highest level in a year. The index climbed to 70.8 from 61.5 in January. Economists were expecting the index to rise slightly to 63.5.
Durable goods orders tumbled 4% in January, following a 3.2% increase the month before. Analysts were expecting orders to have slipped 1.3% during the month.
National home prices fell 4% in the fourth quarter of 2011, putting them back at levels last seen in mid-2002, according to the S&P/Case-Shiller national home price index. That’s the fifth consecutive annual loss and the biggest decline since 2008, when markets were in freefall and prices plummeted more than 18%.
Companies: Shares of Apple ( , Fortune 500) rose to an all-time high above $530 a share Tuesday. The company is expected to announce the iPad 3 at a “special event” in California next week.
Shares of AutoZone (, Fortune 500) rose Tuesday, after the auto parts retailer’s fourth-quarter earnings and sales figures rose and topped analyst expectations. Same-store sales at AutoZone improved almost 6% during the last quarter of 2011.
Shares of Apollo Group (, Fortune 500) tumbled after the operator of for-profit University of Phoenix issued a downbeat outlook for 2012, forecasting sluggish growth in new degree enrollment during the second quarter. Shares of fellow for-profit college DeVry ( ) also fell.
Cablevision (, Fortune 500) shares fell after the cable provider posted earnings that were a penny shy of expectations, but sales that were a bit higher than estimates.
Priceline.com () shares spiked after the online travel company beat earnings and revenue expectations late Monday, thanks to strong growth in international hotel bookings.
Dreamworks Animation () missed earnings estimates when it reported corporate results after the bell Tuesday. Dreamworks’ shares fell in aftermarket trading.
Investors will continue to watch for developments out of Europe, amid ongoing nervousness about the region’s debt crisis.
On Monday, the German Parliament approved the nation’s contribution to a second bailout for Greece. Later in the day, S&P downgraded Greece’s credit rating to “selective default” after the government took legal steps to impose losses on all holders of Greek government bonds.
Investors are growing optimistic ahead of the European Central Bank’s second so-called long-term refinancing operation (LTRO) on Wednesday. The central bank will hold its second auction to allow banks to take three-year loans at low interest rates, bolstering their balance sheets.
In its first auction in December, banks borrowed €489 billion from the ECB. The “flood of money” sparked a rally in stock markets, noted Global Forex Trading’s Kathy Lien, and she says this round of stimulus could also be a boon for stocks.
Most analysts are expecting the size of the ECB’s refinancing stimulus to be even larger on Wednesday, with a high estimate of €1 trillion.
Asian markets ended with solid gains. The Shanghai Composite (Nikkei ( ) increased 0.9%.) closed up 0.2%, the Hang Seng ( ) in Hong Kong spiked 1.7% and Japan’s
Currencies and commodities: The dollar fell against the euro and the British pound but rose versus the Japanese yen.
Oil for April delivery fell $2.01 to settle at $106.55 a barrel.
Gold futures for April delivery rose $13.50 to end at $1,788.40 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.94% from 1.92% late Monday.
First Published: February 28, 2012: 9:47 AM ET