Indicative of the new confidence in the corporate sector and the economic recovery, the Dow Jones Industrial Average has climbed over 125 points to close at record high of 14,253.77.
Yesterday's rise in the US stock benchmark that tracks 30 blue-chip companies came despite sequestration or the automatic spending cuts coming into force.
The rally saw Dow Jones topping the previous record set in October 2007 and helped investors overcome the losses tied to the financial crisis in 2008-2009.
“It really does represent an achievement that we have climbed out of this crater,” Jack Ablin, chief investment officer at Chicago's BMO Private Bank, which manages about $ 66 billion, was quoted as saying by The Wall Street Journal.
“We're back to the highest levels in history, but we've got more things going for the economy and the market than we did last time,” said Art Hogan, managing director at lazard Capital told the CNN.
At the same time Nasdaq, which rose more than 42 points on Tuesday, is nearly 40 per cent below its all-time highs that were set in March
2000, prior to the collapse of the dotcom bubble.
The Nasdaq is trading at its highest level since November 2000 though, CNN said.
Not commenting on the markets, the White House Press Secretary, Jay Carney, told reporters that country's economy is poised to grow and poised to create jobs.
“I would simply say that we have an economy in 2013 that outside economists say and I think government economists agree is poised to grow and poised to create jobs, if only Washington did not unnecessarily hinder that progress,” he said
“What we know, unfortunately, is that if Washington were not in the way here when it came to imposition of the sequester, the growth
that we do see and the job creation that we do see would have been better, would have been greater, if it were not for this adamant refusal to approach this problem in a balanced, sensible, common-sense way,” he said.
On Tuesday at the New York Stock Exchange stocks got another boost after a reading on the service sector in the US showed that it had risen to its highest level of activity in a year, surprising analysts, The New York Times said.
“Given that the service sector accounts for close to 85 percent of the US economy, the strong performance on this index suggests that the overall recovery may be continuing to build on the positive momentum at the end of the year,” Millan Mulraine, a senior strategist at TD Securities was quoted as saying.
“There are some important caveats to the record, however. The Dow is a rather narrow measure of the stock market, so it can provide a somewhat distorted picture of the market's performance,” he said.
Sensex up 109 pts at 1-wk high
Buying in realty, capital goods, metal and IT stocks following firm global cues lifted the benchmark S&P BSE Sensex today by over 109 points to end at one-week high of 19,252.61, extending gains for second straight day.
Smart rise in shares of l&T, Infosys, Tata Motors, ICICI Bank, RIl, SBI, TCS, Sterlite, Tata Steel, ONGC, BHEl and Hindalco mainly supported the Sensex surge.
However, fall in ITC, HUl, M&M and HDFC Bank counters limited the rise to some extent.
The Bombay Stock Exchange 30-share barometer resumed higher and moved in positive terrain throughout the day before ending at 19,252.61, a gain of 109.44 points or 0.57 per cent.
Yesterday, it had registered its biggest gain in the current calender year by rising 265.21 points.
The 50-issue CNX Nifty of the NSE also improved further by 34.35 points or 0.59 per cent to settle above 5,800-mark at one-week high of 5,818.60 today.Brokers said the domestic market got a boost after Asian stocks closed with marked gains while European stocks too were trading higher in early trade due to smart rise on Wall Street last night on signs of an improving US economy.
The Dow Jones Industrial Average ended up by 0.89 per cent to all-time closing high of 14,253.77, breaking the previous peak of 14,164.53 set on October 9, 2007.
In the domestic market, IT stocks attracted investors on account of weak rupee, interest-rate sensitive scrips rose higher as hopes of a rate cut in RBI's policy meet later this month gained further ground, dealers said.
Second-line stocks, which bore the brunt in recent days, remained in the limelight for the second day in a row on good buying by retail investors at low levels. BSE-Smallcap and BSE-Midcap indices outperformed the Sensex, closing up by 1.50 per cent and 1.14 per cent respectively.
Rupee logs best gain in a week, up 20 p at 54.72 vs $
Tracking upward movement in local stocks, the Indian rupee today bounced back by 20 paise, its biggest gain in a week, to close at 54.72 amid fresh dollar selling by exporters and some custodian banks.
Sustained foreign funds inflows of over Rs 500 crore in stocks also helped the rupee recovery while late recovery in dollar overseas later put some pressure on the rupee, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market today, the rupee started on a firm note at 54.74 a dollar from previous close of 54.92. It improved further to a high of 54.61 on strong rally in local stocks amid renewed dollar selling by exporters and some banks.
The rupee later fell back to a low of 54.88 on some dollar demand from importers, mainly oil refiners and early weakness in dollar value in global market. Finally, it closed a tad better at 54.72, registering 20 paise gain or 0.36 per cent.
This was the currency's best gain since 23 paise rise on February 27, 2013.
The Indian stock market benchmark Sensex today improved further by over 109 points or 0.57 per cent, extending gains for straight second day.
The dollar index recovered its early losses and was trading up by 0.11 per cent against a basket of six major rivals.