Dow hits 4-year high, lifted by ISM factory data
By Edward Krudy
NEW YORK (Reuters) - The Dow closed at its highest level in more than four years on Tuesday after U.S. manufacturing expanded at a faster pace than expected in April, easing jitters about a slowdown in the economic recovery.
The Dow now sits at levels not seen since December 2007. The gains leave the benchmark S&P 500 within about 16 points of a high reached in May 2008. A convincing break above that level could set the market up for more gains, traders said.
"That's where a lot of traders' eyes are right now - it might be tough to get through there the first time," said Michael James, senior trader at Wedbush Morgan in Los Angeles.
But the Nasdaq sold off sharply into the close on weakness in Apple (AAPL.O: Quote) and BlackBerry maker Research in Motion RIMM.O in a sign the market could struggle to make further headway in the short-term.
The Institute for Supply Management said U.S. manufacturing growth came in at its strongest rate in 10 months in April. That reading suggested the economy remains resilient after indications it had lost momentum at the start of the second quarter.
Early gains this year have been held in check in recent weeks on worries about U.S. economic growth.
Shares of Intel Corp (INTC.O: Quote), long touted by many investors as undervalued, hit a 52-week high at $29.05. Intel closed at $28.95 - up 2 percent - in a sign that money is still flowing into large-cap technology stocks as the market grinds higher.
Financial, transportation and energy shares, all of which are linked to economic growth, were strong performers. The S&P financial sector index .GSPF rose 1.1 percent, helped by a 2.5 percent gain in Bank of America, which closed at $8.31. Chesapeake Energy (CHK.N: Quote) rose 6.3 percent to $19.60 ahead of the natural gas producer's earnings after the bell. Continued...