Welcome Back to 9000; Dow Sets New '09 High

Wall Street's recovery hit another landmark on Thursday as the Dow surged above the 9000 level to fresh eight-month highs and the Nasdaq Composite rallied for the 12th day in a row amid encouraging signs from the housing market and the latest earnings beats.
Today's Markets
The Dow Jones Industrial Average rose 188.03 points, or 2.12%, to 9069.29, the Standard & Poor's 500 added 22.22 points, or 2.33%, to 976.29 and the Nasdaq Composite picked up 47.22 points, or 2.45%, to 1973.60. Thursday's triple-digit surge was fueled by the third-straight increase in existing-home sales to the highest level since October and another round of better-than-expected quarterly results from bellwether companies AT&T and 3M. “You are getting little building blocks of evidence that there is a recovery on the way,” said Richard Sparks, equity analyst at Schaeffer’s Investment Research.

It's been a long road back to the psychologically-important 9000 level for the Dow, which plummeted as low as 6469 in March amid fears of a depression and financial collapse. But signs the economy is stabilizing and the easing of the credit crisis sent stocks soaring off multi-year lows in March. After a brief correction, the Dow has surged more than 900 points in just eight sessions amid a stellar start to earnings season.

“The good new is we’re up 40% off the lows. The bad news is we were at Dow 9000 in January and we all know what happened after that,” said Craig Peckham, equity trading strategist at Jefferies & Co. “What feels different this time around is this is happening against the backdrop of clear, fundamental performance from Corporate America that’s coming out ahead of expectations.”

The Dow settled at its highest level since Oct. 5 and eclipsed the 9000 level for the first time since Jan. 6. The index was led higher by Alcoa (AA: 10.79, 0.57, 5.58%), DuPont (DD: 30.13, 1.62, 5.68%) and 3M, which beat the Street. McDonald's (MCD: 56.07, -2.75, -4.68%), which reported in-line quarterly results, was the only blue-chip stock down more than 1%.

Capping off its longest win streak since 1992, the Nasdaq Composite jumped more than 2% and settled at its highest level since October. Intuitive Surgical and Celgene were the biggest percentage gainers on the Nasdaq 100 after they posted positive results.

“It’s a freight train. You can’t get in front of it,” said Frank Davis, director of sales and trading at LEK Securities. “It’s sort of like turning the Queen Mary. I thought it would’ve turned down already but it hasn’t. There’s no fundamental reason for it to stay up.”

Earnings Season Stays Hot
The latest earnings beats were headlined by 3M, AT&T and Ford (F: 6.97, 0.59, 9.25%), which joined a chorus of bellwethers demonstrating Corporate America’s ability to offset slumping sales by slashing costs.
But 3M made the biggest splash as the manufacturing bellwether posted a significantly better-than-expected adjusted-profit of $1.20 per share. The company offset a 15% decline in revenue by slashing jobs. 3M also boosted its revenue forecast and the lower end of its profit target.

Despite the huge gains on Wall Street over the past two weeks, the bears continue to contend the rally is based on sticks. “It’s real but not based on ‘reality,'” said Joe Saluzzi, co-head of trading at Themis Trading. “The economy is still a mess but the momentum driven, high-frequency traders continue to bust the shorts.”

In the commodity markets, crude oil rallied for the sixth day of the last seven, following the stock market higher. Crude settled up $1.76 a barrel, or 2.69%, to $67.16 -- the highest level since July 1.

Global Markets
European markets closed in the green for the ninth consecutive day. London's FTSE 100 rose 1.47% to 4559.80, France's CAC 40 jumped 2.08% to 3373.72 and Germany's DAX gained 2.45% to 5247.28 -- a new 2009 high. In Asia, Japan's Nikkei 225 gained 0.72% to 9792.94, Hong Kong's Hang Seng jumped 2.96% to 19817.70 and China's Shanghai Composite advanced 0.97% to 3328.49.