Dow at 13,000 again on housing news

JOSHUA FREED AP Business Writer Published:

The Dow Jones industrial average is taking another shot at 13,000.

The average fell 100 points at the open Monday, then climbed back above 13,000 after a report that the number of Americans who signed contracts to buy homes rose in January to the highest in almost two years.

Just before 2:30 p.m. EST, the Dow was up 27 points at 13,010. The broader Standard & Poor's 500 index rose three points to 1,369. The Nasdaq composite index rose six points to 2,970.

The Dow broke through 13,000 several times last week but hasn't closed above that level since May 19, 2008. On Friday, the S&P closed at its highest level since June 2008.

The National Association of Realtors said its index of sales agreements rose 2 percent last month to a reading of 97, the highest since April 2010. A reading of 100 is considered healthy.

Home improvement retailer Lowe's Cos. rose 2 percent after reporting a 13 percent jump in fourth-quarter profits.

Eight out of 10 industry groups within the S&P 500 rose, led by financials, up 0.7 percent, and consumer discretionary stocks, up 0.3 percent. Utilities and energy stocks fell slightly.

Scott Wren, senior equity strategist for Wells Fargo Advisors in St. Louis, said investors have gotten ahead of themselves since October. The S&P 500 is up 8.7 percent this year alone.

He said he thinks U.S. economic growth is likely to be a mild 2 percent this year, there are fewer people working now than there were at the end of 2007, and Europe may be in a recession.

"I don't see any reason for the market to be on some incredible run," he said.

The price of oil fell below $109 a barrel as investors booked profits after a 14 percent gain this month driven by signs of an improving U.S. economy and fears of an Iranian supply cut.

Government figures show that growth in demand for crude oil has slowed in the U.S. from a year earlier, although some oil traders are betting a strengthening economy will eventually boost consumption.

"Four dollar gas, that's not going to really shut down the economy," Wren said. "$5, $6 gas, that's a different story."

The average U.S. price of a gallon of gasoline has jumped 18 cents over the past two weeks, with a gallon of regular at $3.69, according to the Lundberg Survey of fuel prices released Sunday.

Overseas markets fell slightly on worries about high oil prices. Stocks fell 0.3 percent in Britain, 0.2 percent in Germany and 0.7 percent in France.

The European debt crisis is also still a lingering concern. Talks in Mexico at a meeting of the G-20 nations' finance ministers and central bank heads pointed to the need for the European Union to add billions in funds designed to stabilize the situation and calm markets.

Earlier in Asia, Japan's Nikkei 225 index ended down 0.1 percent at 9,633.9, giving up gains posted earlier in the day. Hong Kong's Hang Seng fell 0.8 percent to 21,217.86 and South Korea's Kospi lost 1.4 percent to 1,991.16.

Other commodities rose, including a 1.2 percent rise in wheat prices in Chicago.

Among U.S. stocks making moves:

-- Cooper Tire & Rubber Company Co. rose 11 percent after it said net income more than quadrupled in the fourth quarter, mostly because of a large tax-related gain.

-- Chipmaker Micron Technology Inc. rose 6.5 percent after Japanese rival Elpida Memory Inc. filed for bankruptcy protection.

-- Warren Buffett's Berkshire Hathaway Inc. rose slightly after the investor said the company's board has picked a successor to run his company, along with two backups.

-- Netflix stock fell 2.7 percent after a downgrade by an analyst at Raymond James.

-- Shares of Sprint Nextel Corp. rose 2.4 percent on reports that its board rejected a purchase of MetroPCS Communications Int. MetroPCS fell 0.7 percent.