DOW - Stocks End Mixed as Dow Hits New High

Dow

11,691.18

+20.43

+0.18%

By: Abby Schultz, JeeYeon Park

Stocks closed mixed a day after hitting multiyear highs despite positive economic news and after word the Federal Reserve didn't believe the economy had improved enough by December to alter its economic stimulus program.

The Dow Jones Industrial Average rose 20.43 points, or 0.2 percent, to close at 11,691.18, its highest close since Aug. 28, 2008.


Tuesday's lackluster session comes a day after upbeat news on manufacturing across the world encouraged investors to get the new year off to a strong start. All the major indexes closed Monday at multi-year highs.

The S&P 500 fell 1.67 points, or 0.13 percent, to close at 1,270.20, while the Nasdaq fell 10.27 points, or 0.4 percent, to close at 2,681.25, ending off the lows of the session. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 18.

Among key S&P sectors, energy, consumer discretionary and materials fell, while telecom rose.

At the Dec. 14 Federal Open Market Committee meeting, central bank officials believed the economic recovery hadn't gained enough strength to warrant a change in the Fed's $600 billion bond-buying program.

If the Fed didn't have enough evidence of a turnaround in the economy to change its stimulus program in December, they probably won't see enough evidence in coming months, Todd Schoenberger, managing director at LandColt Trading told CNBC.com.

That's because, while the economy is improving, headwinds remain, including rising gas prices and still anemic job growth, Schoenberger said.

"The Fed is not going to have evidence that’s going to help them to trim back on that $600B," he said. "That’s good news for stocks—the market wants QE2," he added, referring to the second round of quantitative easing, the name given to the Fed's gradual purchases of long-term bonds.