Dow Hits New High!

Dow

12,062.26

+20.29

+0.17%

By: JeeYeon Park, Abby Schultz

Stocks ended slightly higher after trading lower most of the session as Federal Reserve Chairman Ben Bernanke indicated the central bank would continue to stimulate the economy, even amid signs of growing strength in the U.S. economy, and as investors awaited the January jobs report to be released Friday.

The Dow Jones Industrial Average rose 20.29 points, or 0.17 percent, to close at 12,062.26, the highest closing value since June 19, 2008. The blue-chip index squeezed out a gain the previous session.


The S&P 500 rose 3.07 points, or 0.24 percent, to close at 1,307.10, while the Nasdaq rose 4.32 points, or 0.16 percent, to close at 2,753.88. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 17.


Most key S&P 500 sectors rose, led by consumer discretionary, telecom, and consumer staples.


The market turned higher around 3 p.m., soon after the S&P 500 crossed about 1,304. That level may have triggered shorts who had bet the market would move lower despite the strong economic reports, said Marc Pado, U.S. market strategist and technical analyst at Cantor Fitzgerald.

"As soon as we triggered above 1,304 it was a rocket shot," Pado said. "Nobody wants to be short heading into tomorrow’s numbers."

The Labor Department will release nonfarm payroll data for January on Friday at 8:30 a.m.

Earlier, Federal President Bernanke said high unemployment and low inflation require the Fed to continue stimulating the economy, although he acknowledged the economy is getting stronger.

"Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," Bernanke said in remarks prepared for delivery at the National Press Club.

Turmoil in Egypt also remained in focus as thousands of supporters and opponents of President Mubarak battled in Cairo's main square, raining stones, bottles and firebombs on each other in scenes of uncontrolled violence as soldiers stood by without intervening.

The dollar [.DXY 77.77 0.61 (+0.79%) ] rose against a basket of currencies, moderating gains in oil prices. Brent crude closed slightly below $102 a barrel, after topping $103 earlier, while U.S. light sweet crude dropped to under $91, even as the clashes in Egypt raised the prospect of further unrest in the Middle East.

Prices are soaring across a range of commodities, with copper hitting another fresh high and wheat futures rising to a 2-1/2 year high on Wednesday. Gold rose about 1.6 percent to close above $1,352 an ounce.

While the equity markets were weak for much of the session in the face of strong economic news, there was not a lot of movement or volume. The clashes in Egypt were on investors' minds, but the situation in the Middle East is not the driving force behind U.S. stocks, said Doug Godine, head of equities at Signal Hill Capital.

"The market is worrying about it and dealing with it, but we don’t see it as a major threat to at least the potential strength of our equity markets this year," Godine told CNBC.com.

Rising signs of inflation are more of a worry right now to investors, he said, although Bernanke dismissed concerns that the Fed's stimulative policies were beginning to drive inflation higher.

Generally, Godine said stocks will go up "stubbornly on light volume for awhile—reflective of the encouraging economic news, good earnings news, but remaining pessimism around stocks," noting that flows out of municipal bond and money market funds and into U.S. equity funds are in the initial stages.

"You have a lot of runway there for that trend to continue," Godine said