Dow hits 14,000 for first time since 2007 credit crisis

World share prices on the up after new figures show US economy's underlying stability

Investors continued to bid up global share prices yesterday, with signs of underlying stability in the US economy pushing US markets to their highest level since before the credit crisis.

The gains came after a record January on both sides of the Atlantic. The Dow Jones Industrial Average enjoyed its best start of the year since 1994, up nearly 6 per cent over the month, while in London, the FTSE 100 booked its strongest January in nearly a quarter of a century. British blue chips gained 6.4 per cent, the best January performance since 1989, when they climbed by more 14.4 per cent.

Yesterday, figures confirming underlying strength in the US labour market, along with data showing that the American manufacturing sector had expanded in January, helped the Dow gain 149.21 points to close at 14,009.79 – the first time it's closed above the 14,000 point mark since October 2007, nearly a year before the collapse of Lehman Brothers.

Official figures showed that American employers added 157,000 jobs last month, which led to a marginal uptick – 0.1 per cent – in the unemployment rate to 7.9 per cent. The market, however, took heart from upward revisions in the figures for November and December, with the Labour Department saying there were 127,000 more jobs created over the two months than previously reported.

The higher numbers confirmed that, even though American GDP contracted by 0.1 per cent over the final three months, the underlying picture remained encouraging.

Of particular interest to economists was the improvement in jobs in the construction sector, indicating that the recent improvements in the housing sector, which been aggressively supported by the US Federal Reserve, might finally be generating jobs.

Two separate reports showing an expansion in manufacturing also fed the bulls, who overlooked the weak spots. The US Institute of Supply Management said its manufacturing purchasing managers' index had climbed to 53.1 in January from 50.2 in December, while the data firm Markit said its own gauge of factory activity had climbed to 55.8. In both instances, readings above 50 indicate expansion.

Both the Dow and the S&P 500 showed strength, while in London, the FTSE 100 closed at 6,347.24, up more than one per cent, with UK data also showing signs of improvement.

Manufacturers, one of the culprits behind Britain's shock 0.3 per cent decline at the end of 2012, managed their second successive month of growth, according to the Chartered Institute of Purchasing & Supply. Official insolvency figures, meanwhile, showed the lowest number of firms going bust for more than four years.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935
The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory