Dow Tops 9,000 as Home Sales Rise for 3rd Month

Investors celebrated news of another jump in home sales by propelling the Dow Jones industrials to their first close above 9,000 since January.

The Dow Jones industrials are back above 9,000 for the first time since the beginning of January. A...

The Dow Jones industrials are back above 9,000 for the first time since the beginning of January. A report Thursday of a jump in home sales eased investors' worries about one of the economy's biggest trouble spots. They responded by buying stocks across the market, lifting the major indexes more than 1.5 percent and sending the Dow up 150 points past 9,000.

(Xinhua /Landov)

The stock market's best-known indicator shot up almost 190 points Thursday to 9,069.29, its highest level since November, and all the big indexes gained more than 2 percent.

News that existing home sales rose in June for the third straight month and by a higher-than-expected amount led investors to extend a buying spree that has now lifted the Dow 923 points, or 11 percent, in just nine days. On paper, U.S. stocks have gained $1.2 trillion in value.

The week's economic news and upbeat earnings reports and forecasts from companies including chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. convinced investors that the bets they've placed since March on a recovering economy were well-founded.

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Still, the economy, and in turn, the market, are likely to face more quicksand pits in the months ahead. Many more companies, including retailers, who are a barometer of consumer spending, have yet to announce second-quarter earnings. And many of the corporations that have already released their reports said they made money because they had cut costs so deeply, something that they can't keep doing indefinitely.

There was already some troubling earnings news after trading ended Thursday. Microsoft Corp. missed analysts' expectations for revenue, sending its shares lower in extended trading. American Express Co. and Amazon.com also traded lower after releasing their earnings.

Another ongoing problem is the banking business. Banks are forecasting that they'll continue to suffer losses from loans as consumers keep getting laid off.

But some analysts don't believe investors are caving in to euphoria.

"I don't think the market is signaling that we are fully healed at all but it is telling us that there is a strong likelihood that a recovery is under way," said Ciaran O'Kelly, head of equities, Americas, at Nomura Securities Intl. Inc. in New York.