20071001 Stock Market: Dow Jones Passes 14,000 for Record High

Stock Market: Dow Jones Passes 14,000 for Record High

NEW YORK – By JOE BEL BRUNO, The Associated Press, October 1, 2007

Wall Street began the fourth quarter with a huge rally Monday, sending the Dow Jones industrial average to a record close. Stocks were buoyed by a growing belief that the worst of the credit crisis has passed.

The Dow rose 191.92, or 1.38 percent, to 14,087.55, surpassing its closing record of 14,000.41 set in mid-July. The blue chip index rose as high as 14,115.51 to eclipse its previous intraday high of 14,021.95 set July 17.

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Meanwhile, the market was optimistic that new economic data might nudge the Federal Reserve toward another interest rate cut at its Oct. 30-31 meeting. The Institute for Supply Management said the manufacturing sector grew in September at the slowest pace in six months; the trade group said its index of manufacturing activity registered at 52.0 in September, below forecasts for a reading of at least 52.5.

"People are getting more confident there is going to be an October rate cut," said John C. Forelli, portfolio manager for Independence Investment…

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Broader market indexes also rose sharply. The Standard & Poor's 500 index rose 20.29, or 1.33 percent, to 1,547.04, nearing its all-time trading high of 1,555.90, also reached in mid-July. The Nasdaq composite index rose 39.49, or 1.46 percent, to 2,740.99; the tech-laden index remains well below its high of 5,048.62, reached in 2000 when it was bloated by the dot-com boom.

The Dow finished a turbulent third quarter with a 3.6 percent gain, after the Fed eased investor concerns over the credit and housing markets by lowering key interest rates half a percentage point.

Bonds moved higher Monday, with the yield on the benchmark 10-year Treasury note falling to 4.55 percent from 4.59 percent late Friday. Fixed-income investors, currently concerned about the dollar's recent weakness, interpreted the ISM report as not necessarily portending an interest rate cut, which would further erode the U.S. currency.

The dollar was mixed Monday against other major currencies, while gold prices rose.

A barrel of light, sweet crude fell $1.42 to $80.24 on the New York Mercantile Exchange. This extended last week's decline amid concerns that oil market fundamentals do not support recent high prices.

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