Market Recap: Dow, S&P 500 Reach New 12-Month Highs

Markets opened higher on Monday and appeared steady throughout the morning, with all three indexes hitting intraday highs for the year. But at 2pm investors began to snatch profits, driving prices below opening levels. The final 90 minutes saw stocks rebound into the black, but they failed to match earlier levels.

The Dow closed 0.21% up at a new 12-month high of 9,885.80. That’s 20 points higher than Friday’s close, but earlier in the day it was at 9,909.60. The S&P 500 also climbed to a 12-month peak as it moved up 0.44% to 1,076.18. The last hour rally in the Nasdaq was too weak to break into positive territory; it closed down 0.01% at 2,139.14.

No fresh data was released today, and the bond market was closed for the Columbus Day holiday. 

Energy prices helped spur markets higher. Crude oil prices gained $1.50 to a seven-week high at $73.27. “The [oil] market is trading on expectations of a global economic recovery and pricing into that expectations of higher oil demand,” said Tom Bentz, analyst with BNP Paribas, according to the Wall Street Journal.

The dollar continued to weaken against most currencies. The euro gained 0.46% to 1.4776 and the Canadian dollar hit a new annual high as it climbed 0.79% to 0.9657.

“Global demand for the US dollar is diminishing as recession anxieties recede and it becomes clear that countries like Australia and China and other emerging markets will outpace the U.S. as global conditions improve,” wrote Carl Gutierrez at Forbes.com. “We now have evidence that central banks in countries with cash surpluses are buying non-dollar assets with greater enthusiasm than ever before.”

Earlier in the day, Black & Decker more than doubled its forecast for Q3 earnings to 91 cents per shared (from 35-45 cents).

Also, the Nobel Committee made headlines again this week as it awarded its economics prize to a woman for the first time since its inception four decades ago. Elinor Ostrom, an Indiana University professor, shared the award with fellow American Oliver Williamson for their work on New Institutional Economics.

Last year’s winner, Paul Krugman, called the award “a happy reminder that most of the profession is not caught up in the macro wars!” 

The Q3 earnings session continues from Tuesday to Friday. Highlights include: Intel, J&J (Tuesday); JPMorgan (Wednesday); Harley-Davidson, Goldman Sachs, Citigroup, Google, IBM (Thursday); General Electric, Bank of America (Friday).