Stocks rally on home sales report as Dow tops 9,000
— -- The powerful rally on Wall Street reached a significant milestone Thursday after the Dow Jones industrial average pulled its chin over the 9,000 mark for the first time since January.
A better-than-expected report of a 3.6% rise in existing home sales in June from the National Association of Realtors Thursday is just the latest sign telling investors that the economy's worst may be over.
And now that more than a third of the companies in the Standard & Poor's 500 have reported earnings, the results are coming in better than expected and giving investors hope.
As a result, the Dow Jones industrial average jumped 188.03 points, or 2.1%, to 9,069.29. That pushes the Dow up 3.3% this year so far. Other major stock market indexes are faring even better. The Standard & Poor's 500 rose 22.22, or 2.3%, to 976.29, for an 8.1% gain this year. And the Nasdaq composite index gained 47.22, or 2.5%, to 1,973.60 for a head-turning 25% gain for the year.
"Look at this green. The sea of green," says Joseph Saluzzi, trader at Themis Trading. "It's almost like someone waved a magic wand and everything is OK."
The Dow's gain was the latest jump — and not even the biggest — in a surge that has lifted the index 923 points, or 11%, in only nine days as hopes grow about an economic recovery.
The big question, though, is whether the market's recent tear is just a brief rally sparked by over optimism that quickly fades if there's any sign of economic weakness. Such failed upturns in stocks can be somewhat common and are often called bear market rallies.
Saluzzi says that the economy's main problems, including high unemployment, housing market woes and toxic bank assets, are still major problems facing the system. But right now, investors don't care. "I'll give you a zillion negatives. But right now, they don't matter. It's all momentum," he says.
Related Stories
ABC News Live