Dow Jones breaks through 11,000 barrier

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The Independent Online
CONTINUING ITS breathtaking ascent, the Dow Jones industrial average last night broke through the 11,000 barrier as investors reacted to favourable economic reports from US manufacturing and directed funds to cyclical stocks, writes David Usborne.

After rising steadily through the day, the Dow Jones seemed set to close just beneath the 11,000 milestone. It gathered fresh steam in the last few minutes of trading, however, and finally closed at 11,014.69. Over the day it rose by 225.69 points, equivalent to 2.09 per cent.

It was only on 29 March that the Dow closed over the 10,000 mark for the first time. That spurred predictions from market watchers that the index might reach 11,000 by the end of the year. Not even the most optimistic analysts have been able to keep pace with the Dow as it continues its climb.

Yesterday's leap was fuelled in part by a report from the National Association of Purchasing Management showing a slowing of activity in manufacturing. The report eased fears of a possible reawakening of inflation.

"We continue to have information supporting that the economy is strong, which gives investors a reason to buy the cyclical components," said Alan Skrainka of Edward Jones.

The hottest performer on the Dow yesterday was Minnesota Mining. In contrast to the Dow, the high-technology Nasdaq indexclosed 7.27 points lower.