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U.S. stocks surged on Tuesday, sending the Dow Jones Industrial Average to a new all-time closing high and intra-day high, as investors became more confident in the stock market.
The blue-chip Dow climbed 125.95 points, or 0.89 percent, to close for the first time above 14,200, at 14,253.77. The broader Standard & Poor's 500-stock Index soared 14.59 points, or 0.96 percent, to 1,539.79. The tech-rich Nasdaq Composite Index climbed 42.10 points, or 1.32 percent, to 3,224.13.
After the surge, the S&P 500 was only 1.6 percent lower than its historical high set in October 2007.
Traders and guests cheer after ringing the closing bell at the New York Stock Exchange on March 6, 2013. U.S. stocks surged on Tuesday, with the Dow Jones Industrial Average setting all-time closing high and intra-day high, as investors became more confident in the stock market. (Xinhua/Wang Lei)
The Dow broke through its all-time closing high of 14,164.53 and all-time intraday high of 14,198.10 within minutes of the opening bell, following rallies in European and Chinese stock market.
"The market pushing towards all-time highs is a bit head scratching indeed. The market was able to start stronger this morning coming off the heels of positive performance out of Europe and China," Gregory J. Keating, managing director of New York- based James E. Coffey Securities Inc, told Xinhua.
The major stock indices from Europe were boosted on Tuesday by better-than-expected retail sales in January for the euro area, up 1.2 percent, the biggest gain since December 2009.
China's Shanghai Composite Index surged 2.3 percent on Tuesday, a day after the benchmark index plunged 3.7 percent in the wake of strict measures taken over the weekend by Chinese government to curb rising property prices.
Guests cheer after ringing the closing bell at the New York Stock Exchange on March 6, 2013. (Xinhua/Wang Lei)
Wall Street also gained momentum from strong non-manufacturing sector activity in the United States. The Purchasing Managers' Index for services sector registered 56 in February, higher than the 55.2 posted in January, according to the Institute for Supply Management's Non-Manufacturing Business Survey.
Investors were still pouring money into stocks, believing the market would continue to move higher, though the U.S. equity market has posted an impressive performance since the beginning of this year.
Tuesday's rally came one day after Warren Buffett's optimistic comments on stocks on CNBC that stocks were cheaper than other forms of investment, sending the Dow to close at a second all-time high on Monday.
Traders posted mixed views towards the trends of the market. According to a poll on Wall Street by CNBC, 51 percent respondents predicted the market would go higher while 49 percent said otherwise.
Jason A. Weisberg, managing director at Seaport Securities, told Xinhua that he was 100 percent sure that the Dow would keep going higher and hit 15,000 by year end barring some geopolitical disasters.
However, Keating took a more cautious stance, saying "I think a short term pull back is imminent just for the fact that investors will want to do some profit taking as headlines suggest no real solution in sight in the sequester dealings in Washington."
Traders work on the floor of the New York Stock Exchange on March 6, 2013. (Xinhua/Wang Lei)
"Long term, when you have such a smart investor like Warren Buffet believing in the value of stocks right now, I think that is pretty tough to ignore," Keating added.
In other markets, crude prices rebounded on Dow's rallies after hitting a multi-week low.Light, sweet crude for April delivery was up 70 cents, or 0.77 percent, to settle at 90.82 dollars a barrel on the New York Mercantile Exchange. Brent crude for April delivery added 1.52 dollars, or 1.4 percent to close at 111.61 dollars a barrel.
While the U.S. dollar continued falling against major currencies as investors' risk appetite expanded due to a stronger market. In late New York trading, the euro rose to 1.3041 dollars from 1.3024 in the previous session and the British pound slightly climbed to 1.5113 from 1.5112 dollars.
