The Dow Jones Industrial average jumped 0.5 percent at the end of the day on Thursday, helping it reach the highest level in nearly three years. While the gains proved to be impressive, some say they were muted a bit due to disappointing readings in manufacturing and labor.
The Dow Jumps 52 Points
Thursday was a good day for the Dow as it surged 52 points to end at 12,505.99, a high not seen since June 2008. Gains were said to be led mostly by a nearly 4-percent surge in shares of Travelers, along with an average 2-percent jump in both IBM and Alcoa.
All numbers in the report were not so great, though. Reports surfaced of disappointing numbers in regional manufacturing and the labor market, both of which stopped the average from seeing even better gains.
Why the Leap in Stocks?
The Dow was not the only index to see an increase in stocks on Thursday. The S&P 500 rose 7 points (0.5 percent), aided by 15-percent leaps from Biogen Idec and SLM. Nasdaq Composite advanced 18 points (0.6 percent) thanks to jumps from Apple, Qualcomm, Biogen Idec and F5 Networks.
So why the sudden jump across the board?
Economists say that about 70 percent of the companies in the S&P 500 have been earning more than expected. Higher earnings help to spur stock rallies. Shares are expected to continue their increase as long as earnings are good.
Some investors have been contemplating moving from bonds to stocks for a while. If rallies continue as they did on Thursday, some who may not have felt comfortable in risky investments in the past may, at the very least, choose to push for a more diversified portfolio.
