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By CHRISTINA REXRODE, AP Business Writer
	

NEW YORK (AP) — It came and went in a flash, a number on a board
for seconds at a time, but its symbolic power couldn't be
dismissed.

      The Dow Jones industrial average, powered higher all year by
optimism that the economic recovery is finally for real, crossed
13,000 on Tuesday for the first time since May 2008.


      The last time the Dow occupied such rarefied territory,
unemployment was a healthy 5.4 percent, and Lehman Brothers was a
solvent investment bank. Financial crises happened in other
countries, or the history books.


      The milestone Tuesday came about two hours into the trading day.
The Dow was above 13,000 for about 30 seconds, and for slightly
longer at about noon and 1:30 p.m., but couldn't hold its gains. It
finished up 15.82 points at 12,965.69.


      Still, Wall Street took note of the marker.


      It was just last summer that the Dow unburdened itself of 2,000
points in three terrifying weeks. S&P downgraded the United States
credit rating, Washington was fighting over the federal borrowing
limit, and the European debt crisis was raging.


      A second recession in the United States was a real fear. But the
economy grew faster every quarter last year, and gains in the job
market have been impressive, including 243,000 jobs added in
January alone.


      "Essentially over the last couple of months you've taken the
two biggest fears off the table, that Europe is going to melt down
and that we're going to have another recession here," said Scott
Brown, chief economist for Raymond James.


      The tumult of last summer and fall left the Dow as low as
10,655. Its close Tuesday put it 22 percent above that low. The Dow
is 1,199 points from an all-time high, a 9 percent rally from here.


      A long-awaited deal to cut the debt of Greece and prevent a
potentially catastrophic default, announced before dawn in Europe
after 12 hours of talks, helped the Dow clear 13,000.


      Under the bailout deal, Greece will get euro130 billion, or about
$172 billion, from other European nations and the International
Monetary Fund. In a separate deal, investors in Greek bonds will
forgive euro107 billion in debt.


      After months in which talks crawled along and vague headlines
yanked the market up and down, the conclusion was almost
anticlimactic because the markets were already expecting an
agreement.


      European markets didn't take the news as well. Stocks closed
down 3.5 percent in Greece, where stocks have lost 80 percent of
their value since 2007. Stocks declined less than 1 percent Tuesday
in Germany, France and Britain.


      Investors noted that Greece remains in deep recession. Its bond
investors will take a 53.5 percent loss on the face value of their
bonds, which could discourage future investment.


      In the U.S., investors were cheered by earnings from Home Depot,
watched closely as a barometer of American spending on homes, and
Macy's. Wal-Mart missed Wall Street expectations, and its stock
lost 4 percent, worst among the 30 stocks in the Dow.


      The Dow has climbed 6 percent this year and has not lost 100
points on any day. The Greek debt crisis may be receding, but high
gasoline prices are emerging as a threat to the economic recovery,
and thus the stock market.


      A gallon of regular gas costs $3.57 on average, the highest on
record for this time of year. With tension building over Iran's
nuclear ambitions, Iran has halted oil exports to Britain and
France and threatened to stop shipping to other European countries.


      The price of oil settled at $106.25, up $2.65 for the day and
its highest level since last May. The price jumped more than $1 in
about 20 minutes after Iran's foreign ministry spokesman told
reporters that a U.N. team visiting Iran has no plans to inspect
the country's nuclear facilities and will only hold talks with
Iranian officials.


      "That was the olive branch the market was holding onto," said
Phil Flynn, an analyst for the brokerage PFGBest. "If they're not
going to discuss the nuclear program, then we're a lot closer to a
conflict than further away," he said.


      Airline stocks got clobbered. United Continental lost 9 percent,
Delta Air Lines 7 percent. The Dow transportation average lost 1.5
percent.


      Materials, telecommunications and energy companies led the
industries gaining ground. Health care companies, makers of
consumer staples and utilities, traditionally stocks to own in more
cautious times, were lower.


      The Standard & Poor's 500 index surpassed 1,363, its peak from
April 2011, but closed at 1,362.21, up 0.98 point. The Nasdaq
composite, which is heavy with technology stocks and trading at
levels not seen since December 2000, closed down 3.21 points at
2,948.57.


      Metals prices jumped because of expectations that demand may
improve after the Greek bailout package was approved and China took
another step to stimulate economic growth. Silver finished up 3.7
percent, and platinum, copper and palladium all rose 3 percent or
more. Gold ended up 1.9 percent.


      The Dow industrials last closed above 13,000 on May 19, 2008.
The next day, they crossed under 13,000, not to return for almost
four years. They fell as low as 6,547 on March 9, 2009. A reading
of 13,094 would double that.


      Dan McMahon, director of equity trading at Raymond James, called
the 13,000 mark "just a big round number" as a matter of market
fundamentals. But he added: "Psychologically, it matters."


      The milestone could motivate cautious investors to pump more
money back into the stock market. The yield on the government's
benchmark 10-year Treasury note rose to 2.06 percent from 2.01
percent Friday, a sign that fewer investors wanted the bonds and
were instead willing to buy riskier stocks.


      "You need notches along the way to measure things," and Dow
13,000 is as good as any, said John Manley, chief equity strategist
for Wells Fargo's funds group. "Is 50 older than 49 and a half?
Yes, by six months. Do those six months really make a difference?
Probably not. But it does give us a fixed point, something we can
look at."


      The Dow is also an imperfect measure of the economy's health. It
is made up of just 30 companies, and it's weighted so that the few
with the highest stock prices carry the most heft.


      A tiny percentage change in the stock of IBM, which is trading
around $193, sways the index much more than a giant change in the
stock of Bank of America, which is trading around $8.


      Last year, the Dow rose 5.5 percent. But strip out IBM and
McDonald's, the two stocks with the highest prices last year, and
it rose just 1.8 percent, according to calculations by Birinyi
Associates.


      Dow Jones, which decides which 30 companies are the best
barometer, says the index can accurately represent the economy
because the Dow 30 make up 25 to 30 percent of the market value of
all U.S. public companies.


      - Barnes & Noble fell 4 percent after missing expectations.
Rising costs offset higher sales of both traditional books and
digital books. Investors seemed encouraged that the bookstore
chain, a survivor in an era that has felled competitors like
Borders and Waldenbooks, plans to introduce a cheaper Nook to
compete with Amazon's Kindle Fire.


      - J.C. Penney, which is trying to reinvent itself and just
brought in an Apple veteran as CEO and changed its logo, fell 3
percent after Fitch Ratings dropped its credit grade to junk
status.


      - Wal-Mart fell 4 percent after missing analysts' expectations
for revenue and per-share earnings.


      - High-end department store Saks rose 3 percent after beating
analysts' expectations.


      AP Business Writer Sandy Shore contributed to this report.

Gallery

Business and Economic News

The Dow Jones industrial average crossed 13,000 on Tuesday for the first time since before the 2008 financial crisis.

Dow tops 13,000 for first time since 2008

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