Dow, S&P hit milestone on five month rally

The Dow closed above 13,000 for the first time since May 2008 yesterday and the S&P 500 also hit a milestone, on buoyant US consumer confidence data and as a sharp fall in oil prices pushed the nearly five-month rally forward.

The S&P 500 closed above 1,370, its May 2011 intraday high, a move that could attract momentum buying as money managers chased performance, even as low volumes of late had raised concerns about how long the rally would hold.

According to some analysts, there was nothing technically favouring a downturn at the moment and even as there was no doubt that the market had been overbought since the beginning of February. Yet, in a powerful uptrend, prices would continue to climb for some time amid overbought conditions.

Technology shares were the best performers, and the Nasdaq was trading at its highest since 2000. While Micron Technology Inc was up 3.7 per cent to $8.88 after Intel Corp said it would sell its stake in two wafer factories to Micron and buy chips from the company (See: Micron Technology to buy Intel's stake in NAND flash JV for $600 million).

Intel surged 1.3 per cent to $27.24, with the PHLX semiconductor index .SOX that rose 1.6 per cent.

The Dow Jones industrial average DJI was up 23.61 points, or 0.18 per cent, to close at 13,005.12, while the Standard & Poor's 500 Index, SPX, rose 4.59 points, or 0.34 per cent, to end at 1,372.18. The Nasdaq Composite Index .IXI rose 20.60 points, or 0.69 per cent, to finish at 2,986.76.