By Kate Gibson, MarketWatch –
NEW YORK — U.S. stocks rose Tuesday, sending the Dow industrials to their highest close since 2008, as Greece reportedly neared accord on budget cuts, job openings rose in America and the Federal Reserve kept to its low-rate stance.
“The market is mostly trading on news regarding Greek sovereign debt; maybe we can put one more issue behind us,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
Also, a Labor Department report had job openings rising to 3.38 million in December from 3.12 million the month before, showing “continued progress in the labor market,” Luschini said.
The Dow Jones industrial average rose 33.07 points, or 0.3 percent, to 12,878.20, its highest close since May 19, 2008. It had reversed higher early in the session after falling as much as 62.56 points.
In Athens, government officials reportedly have a draft deal to present to Greek party leaders on Wednesday detailing another bailout.
“We opened on the back of declining European equities, so that’s the bias the market took on the open — that whatever had rattled Europe would carry over. But now a final draft is seemingly moments away, so the market is more inclined than not to treat it as good news,” Luschini said of the market’s about-face.
In Washington, Federal Reserve Chairman Ben Bernanke reiterated his call on lawmakers to cut the nation’s long-term red ink, and repeated that the labor market is a long ways from returning to good health.
Bernanke, who also took questions from lawmakers, did make the comment that there is “still a lot of underlying weakness in the labor market, and the Fed is not ignoring that prospect, which keeps hope of QE3 alive,” Luschini said of prospects of a third round of quantitative easing by the central bank.
“There’s nothing going on this week, so people are reaching for a catalyst. Plus, Bernanke said that notwithstanding the jobs number on Friday, we’re going to remain accommodative,” said Art Hogan, a strategist at Lazard Capital Markets. “The punch bowl is still on the table.”
Dow components were led by a 1.4 percent gain in McDonald’s Corp. Helping lift the blue-chip index, Coca-Cola Co. shares climbed 0.8 percent after the beverage maker reported adjusted fourth-quarter results that topped consensus expectations.
Boeing Co. shares were down for a second day, off 0.3 percent, on the heels of production delays reported due to a structural fix needed in some of its 787s.
The S&P 500 index gained 2.72 points, or 0.2 percent, to 1,347.05, with utilities leading the gains and natural-resource stocks the greatest laggard among its sectors.
The Nasdaq composite index advanced 2.09 points, or 0.1 percent, to 2,904.08.
Any selloff, regardless of how short or shallow, is being used as a buying opportunity, noted Elliot Spar, market strategist at Stifel Nicolaus.
“If feels like some money managers are still underinvested, while those shorting have to take them back when it doesn’t work. The march has become a little more rotational in recent days,” said Spar, who questioned whether the trend marked a prelude to a full-fledged correction.
Moving average and other technical gauges are “all indicative of a market that seems stretched,” Luschini said.
“When you’re up more than 7 percent the first five weeks of the year is probably not a sustainable pace,” he said, adding that a correction of between 3 percent and 5 percent is likely in order.