DJIA / Market Close for Thursday, February 16, 2012

The Dow gained +123.13 (+0.96%) to close at 12,904.08. The Nasdaq, S&P 500, Russell 2000 and Gold all closed higher.

Investors sent stocks to their highest levels of the year today, buoyed by bits of encouraging news about jobs and housing. At least for a day, investors overlooked the lack of clarity about Greece’s marathon negotiation for a bailout.

The Dow Jones industrial average rose 123.13 points, its third triple-digit gain this year. It was the highest close for the Dow since May 19, 2008, four months before the worst of the financial crisis. As the Dow moved to within sight of 13,000, applause broke out at the closing bell on the floor of the New York Stock Exchange.

The Standard & Poor’s 500 was up 14.81 points to 1,358.04, its highest close in nine and a half months. The Nasdaq composite, which has had an even stronger year than the Dow and S&P and is trading at its highest since 2000, was up 44.02 points to 2,959.85.

The rally today was broad, with only Kraft (KFT) closing lower out of the 30 Dow component stocks. All 10 industry groups in the S&P were higher, led by materials stocks, including strong showings from DuPont and Dow Chemical.

A payroll tax cut for 160 million Americans, set to expire at the end of this month, would be extended through December under a bipartisan deal announced early today by U.S. congressional leaders. The deal would also renew expiring jobless benefits for millions of people and prevent a pay cut for doctors of elderly Medicare patients.

The payroll tax was first reduced from 6.2 percent to 4.2 percent in the beginning of 2011 at the request of Obama as part of his bid to stimulate the economy. The new deal would continue the 4.2 percent rate until the end of this year, during which it is projected to put an additional $1,000 in the pockets of the average American working family.

Just two years after General Motors (GM) was rescued and reconstituted through bankruptcy and a government bailout, the company cruised through 2011 to post the biggest profit in its history. The company’s performance in North America and Asia helped it earn $7.6 billion for the year, beating the record of $6.7 billion set during the truck boom in 1997.

Good news for GM is good news for the U.S. government, which still owns 26.5 percent of the company and needs more strong earnings to push up the stock price.

Upcoming Dow Stock Earnings Reports

Home Depot (HD) reports earnings on 2/21/2012 before the market open.

Kraft Foods (KFT) reports earnings on 2/21/2012 after the market close.

Wal-Mart (WMT) reports earnings on 2/21/2012 before the market open.

Hewlett Packard (HPQ) reports earnings on 2/22/2012 after the market close.

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