Dow Eyes 12,000 as Rally Resumes

Dow

11,980.52

+108.68

+0.92%

Dow Hits New 2 1/2-Year High

By: Abby Schultz, JeeYeon Park


Stocks closed higher with the Dow finishing 20 points shy of 12,000 on the strength of materials and tech stocks and as investors awaited a handful of major earnings later this week.

The Dow Jones Industrial Average rose 108.68 points, or 0.92 percent, to close at 11,980.52—inching closer to the psychologically important 12,000 level. The close was the highest for the blue-chip index since June 19, 2008.


The S&P 500 rose 7.49 points, or 0.6 percent, to close at 1,290.84, while the tech-heavy Nasdaq snapped a three-day losing streak to rise 28.01 points, or 1.04 percent, to close at 2,717.55. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 18.

Among key S&P 500 sectors, technology, industrials and materials advanced.

The Dow last closed above 12,000 on June 19, 2008, when it finished the session at 12,063.09.

The market's biggest movers on Monday were defensive, large cap names, and not smaller, so-called momentum stocks. One reason may be that investors want to get out of risky names as the market hits highs, but they want to stay invested in equities, said Marc Pado, U.S.market strategist at Cantor Fitzgerald.

"Money doesn’t want to leave the market, it's not fleeing to cash or bonds, but (investors are )seeking out equity names that are more defensive: health care, food, maybe some pharmaceutical stocks—conservative names that take you out of the risk but don’t take you out of the market," Pado said.