Dow Jones closes at 2½-year high

| February 2, 2011 | 0 Comments
Dow Jones closes at 2½-year high

Wall Street’s Dow Jones Industrial Average closed above 12,000 points on Tuesday - the first time since June 2008.

Positive corporate earnings, a strong rise in US car sales and solid manufacturing data boosted US stocks as all major indices were up on the day - despite the political unrest in Egypt.

In addition, the Standard & Poor’s 500 index closed at the highest level since August 2008.

While the figures will boost confidence, fears still remain for the US economy amid a weak housing market and stubbornly high unemployment.

However, last week, the Commerce Department reported a further rise in consumer spending in the US for the month of December.

Spending grew 0.7% in the month after rising by 0.3% in November, the sixth consecutive monthly rise.

The ongoing rise in consumer spending suggest a sustainable recovery is underway in the world‘s largest economy.

Consumer spending accounts for approximately two-thirds of economic output in the US
Meanwhile, the Commerce Department said consumer spending also grew at its fastest pace in three years during 2010.

Meanwhile, the US economy grew by an annualised 3.2% in the fourth quarter. While the rate of growth was slightly lower than the 3.7% expected by analysts, it is higher than the 2.6% growth in the third quarter.

Meanwhile, the US economy grew by 2.9% in the whole of 2010 – the strongest year of growth since 2005.

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