NEW YORK - U.S. stocks surged Tuesday, with the Dow average closing above 12,000 for the first time since mid-2008. The gain came after manufacturing data shifted investors' gaze toward the global recovery.
“Strong breadth out of the gate followed by a stronger-than-expected ISM (Institute for Supply Management) data set the tone for today’s great leap forward,” said Elliot Spar, market strategist at Stifel Nicolaus & Co.
The Dow Jones industrial average rose 148.23 points, or 1.3 percent, to 12,040.16, its first close above 12,000 since June 19, 2008.
The blue-chip benchmark crossed but failed to close above 12,000 last week.
Tuesday’s equities market was also bolstered after United Parcel Service Inc., the biggest package delivery company on the globe, reported a quarterly profit that beat expectations and projected record-high profit in 2011.
On Monday, the Dow polished off its first January-month gain in 14 years, an ending that bodes well for the remainder of the year if historical trends persist, given its January performance usually predicts the outcome of the full year, a scenario that failed to materialize the past two years.
On Tuesday, all but three of the blue-chip index’s 30 components were higher, led by Pfizer Inc., up 5.5 percent, after the pharmaceutical giant posted a higher fourth-quarter profit and set a $5 billion buyback program.
Procter & Gamble Co. shares were the worst Dow performer, edging back 0.3 percent.
The Standard & Poor’s 500 index gained 21.47 points, or 1.7 percent, to 1,307.59, its first close above 1,300 since Aug. 28, 2008.
Natural-resource companies and financials rose the most among the S&P’s 10 industry groups, with consumer staples the worst-performing sector.
The Nasdaq composite index added 51.11 points, or 1.9 percent, to 2,751.19.
For every stock on the decline, more than five gained on the New York Stock Exchange, where 1 billion shares traded.
The milestones for the Dow and S&P 500 are part of a remarkable run for stocks that began on March 9, 2009. The Dow stood at 6,547, its lowest point in 12 years. Since then, in the fastest climb since the Great Depression, it has risen 84 percent thanks to surging corporate profits, the unexpected resilience of personal spending and a bond-buying intervention by the Federal Reserve that made stocks more appealing. And some of the early gains came because investors realized that stocks had fallen too far during the financial crisis.
The rebound could bring small investors back to the stock market. They have pulled nearly $245 billion out of U.S. stock mutual funds since June 2008, the last time the Dow was at 12,000, according to the Investment Company Institute. Earlier in the decade, they typically put in $145 billion a year.
The Dow closed at its highest level – 14,164 – on Oct. 9, 2007.
Staff writer C.R. Roberts and The Associated Press contributed to this report.