Dow Jones breaks through 11,000 barrier

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The Independent Online

US stock markets shot ahead yesterday, with the Dow Jones Industrial Average broaching the 11,000 barrier for the first time in four months.

US stock markets shot ahead yesterday, with the Dow Jones Industrial Average broaching the 11,000 barrier for the first time in four months.

The Dow climbed 119 points, or 1.09 per cent, ending the day at 11,027. That was its highest close since 25 April, when it hit 11,125. The increase capped a week that had seen significant rises in blue-chip stocks, with the Dow up 2.4 per cent for the week as a whole.

The recovery was stoked by improving inflation prospects, as markets shift their perceptions of the next moves by the US Federal Reserve. The central bank next meets to consider monetary policy later this month and with signs of a slowdown, markets increasingly believe that there will be no further increases in interest rates at this meeting.

The Nasdaq composite, an index which largely measures hi-tech stocks, has had a tougher time but it was also up by 29.48 points, or 0.78 per cent, to close at 3,789.47.It erased an early loss of more than 1 per cent, prompted by disappointment over the quarterly results from the technology bellwether Dell Computer. Dell, the world's No 2 personal computer maker and the day's most heavily traded issue on the Nasdaq, tumbled $41?16 to $3711?16. Its earnings beat estimates, but revenues fell short of what Wall Street had expected.

Earlier, figures released by the US government showed encouraging trends in inflation. The July Producer Price Index, which measures wholesale prices, was flat, encouraging the view that price rises in the economy have slowed. The figure comes against a background of a slowing, but still growing, US economy.

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