Posted: Jan 26, 2012 10:25 AM by Paul Kavanaugh
Updated: Jan 26, 2012 10:27 AM
The Dow Jones industrial average was trading near its highest close since the 2008 financial crisis Thursday afternoon after solid news on factory orders and strong earnings from U.S. manufacturers highlighted the economy's growing momentum.
Broader market indexes edged lower, though they are also sharply higher this year. Traders appear less afraid of spillover damage from the European debt crisis, and data on jobs and manufacturing have been consistently strong.
"With global risk off center stage and attention going back to the fundamentals, this market was ready to explode, which is exactly what it is doing," said Doug Cote, chief market strategist with ING Investment Management.
Before the market opened, the government reported that unemployment claims rose only modestly last week after a steep decline the week before. The long-term trend still indicates an improving job market.
Orders to factories for long-lasting manufactured goods increased in December for the second straight month, and a key measure of business investment rose solidly.
That strong demand was apparent in quarterly earnings reports from U.S. manufacturers. 3M stock rose 1.1 percent after its fourth-quarter profit beat Wall Street's estimates.
Caterpillar, the world's biggest heavy equipment maker, soared 3 percent, the most of the 30 companies in the Dow, after beating analysts' estimates last quarter. The company expects to do the same this year as global demand remains high.