New York (CBS/AP) - The Dow Jones industrial average swept past 14,000 for the first time Tuesday, rising on a relatively mild inflation report and better-than-expected profit reports from blue chip names including Coca-Cola Co. and Merrill Lynch & Co.
The stock market's best-known indicator crossed 14,000 in the first half-hour of trading, rising to 14,002.60, having taken just 57 trading days to make the trip from 13,000.
It stayed above 14,000 for just a moment.
Stocks have risen fairly steadily since the spring amid a continuum of buyout news and evidence that despite higher fuel prices and the ongoing problems in the housing market and mortgage lending industry, consumers are spending and companies remain optimistic about the future. With the Federal Reserve ever vigilant about inflation, any news that prices are rising at a moderate pace has added to the market's momentum, as it did Tuesday.
The release of upbeat earnings reports also reassured a market that had worried that a slowing economy and rising energy prices would slash into corporate profits.
But the Dow's latest accomplishment does raise questions about whether they are buying more on speculation than fundamentals. A week ago, the average tumbled nearly 150 points after disappointing forecasts from Home Depot Inc., Sears Holdings Corp. and homebuilder D.R. Horton Inc., but only two days later, the Dow barreled 283 points higher as investors chose to put a positive spin on a generally lackluster series of retail sales reports.
The short time that it took the Dow to pass this its milestone recalls its ascent during the dot-com boom, especially since it took only 129 days to make the passage from 12,000 to 13,000. In the late 1990s, the Dow took just 24 days to go from 10,000 to 11,000, and 89 days to go from 6,000 to 7,000.
The end of the high-tech boom plus the recession and the aftermath of the Sept. 11, 2001, terror attacks helped send all the major market indexes into reverse. It took the Dow 7 1/2 years to trek from 11,000 to 12,000, and only last October began setting its first record highs since January 2000.
The S&P 500 has also surpassed its early 2000 highs, reaching a new closing high last month and last week surpassing its trading high. The Nasdaq, overinflated by the high-tech boom, is not expected to approach its closing high of 5,048.62 in the foreseeable future.
The move higher Tuesday came as Wall Street sorted through a mixed inflation reading and better-than-expected profit reports from blue chip names including Coca-Cola Co. and Merrill Lynch.
The gains also follow the Labor Department's report that inflation at the wholesale level fell in June but heated up more than expected when often volatile food and energy prices are excluded. The producer price index slipped 0.2 percent in June but the so-called core figure, which excludes food and energy, rose 0.3 percent. But without an increase in cars and light trucks, core inflation would have increased a more moderate 0.1 percent.
Rising food and energy costs have in recent months unnerved some investors who have worried that inflation will deplete the ability of many consumers to keep spending and help prop up the economy.
Copyright 2007, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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