A ripple of optimism lifted stocks yesterday to their highest point since May 2008, as the threat of Europe’s financial crisis seemed to ease and the Dow Jones industrial average briefly broke through 13,000.
Analysts said there were reasons to hope for better times in the US and global economies, thanks to European nations assembling an aid package for Greece. But corporate earnings here at home continued to show a mixed picture of the nation’s financial health, and economists fretted that rising gasoline prices could derail a fledgling positive sentiment in the markets.
The Dow’s brushing up against 13,000, if largely symbolic, was the latest sign that the market has regained its footing since the financial crisis.
Investors are seeing improvements in unemployment and housing, and stocks have rallied so far in 2012.
“It is confirmation that the economy is moving in the right direction. American businesses are doing very well,’’ said Mark Zandi, chief economist for Moody’s Analytics.
The blue-chip stocks of the Dow closed at 12,965.69, up 0.1 percent, largely pulled down by Walmart Stores Inc., as the retail giant reported a 15 percent decline in its quarterly profit. Other bellwether stocks pointed to better times for consumers, as Home Depot Inc. and Macy’s Inc. both posted higher earnings.
Jennifer K. Silver, managing partner at Redwood Investments in Newton, said she believes this year’s developing rally is overdue.
“You have valuations that have been quite low. You have reasonably good corporate earnings. You have unemployment that’s still high but coming down; it’s moving in the right direction,’’ Silver said. With consumer debt levels improving and the housing picture getting healthier, she noted, there are real reasons to anticipate a better period for stocks.
“Ultimately it’s driven by fundamentals and how companies are doing,’’ Silver said. “But from time to time, psychology plays a big role in getting people to act. There are a lot of pent-up reasons for the market go up.’’
The Dow hit its all-time high, 14,164.53, on October 9, 2007.
Stocks ended 2011 roughly flat, after a deep plunge in late summer and early fall brought on by Europe’s woes and a downgrade of the AAA credit rating on US debt. While those problems have not been solved, analysts said, they are less pressing than last summer.
The Dow is up 6.4 percent already in 2012, and the Standard & Poor’s 500 index has jumped 8.2 percent. But this almost euphoric two-month experience could be slowed down, economists said, if gas prices jump to $4 a gallon and higher by Memorial Day, and prices at the pump take away from consumers’ ability to spend on other goods and services.
“One of the things that could really upset the proverbial apple cart is gasoline prices. It’s the most significant near-term threat to the positive feelings,’’ said Zandi, the economist.
Oil prices have surged to their highest point since last May, on fears that Iran will cut off more of its oil supply to Europe, having already stopped sales to companies in England and France.
‘There are a lot of pent-up reasons for the market go up.’Jennifer K. Silver Redwood Investments, Newton
And longer term, economists at IHS Global Insight in London said in a report yesterday, Greece still has a lot of work to do. While Europe’s $172 billion aid package should head off disaster, Greece needs a plan for growth. The IHS economists wrote that Greece is immersed in an “austerity trap,’’ where efforts to cut spending and raise tax revenue, coupled with a deep recession “feed each other with dire consequences.’’
The Standard & Poor’s 500 index yesterday rose slightly, by nearly one point, to 1,362. The Nasdaq composite index slipped 3.21 points to 2,948.57.Beth Healy can be reached at email@example.com.