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Dow Jones Average Breaks All-Time High

The Dow Jones industrial average rallied to unprecedented highs Tuesday, rising above its highest closing on record-14,164.53-reached back in October 2007 shortly after the opening bell just to sustain that momentum and close at a new record level.

The upward momentum that pushed the Dow 125.95 points higher to close up 0.89 percent at 14,253.77 was fueled in part by improving economic data out of Europe and news that China is looking not only to spend a lot of money to support economic growth, but is also intent on meeting its growth target of 7.5 percent in 2013.

On the domestic front, robust corporate earnings and solid manufacturing data pointing to growing demand for goods also helped boost the stock market. Indeed, the S&P 500 also tagged on another 0.96 in gains, closing at multi-year highs of 1,539.79, just shy of its 2007 record closing of 1,565.15, while the Nasdaq shot to its highest level in more than 12 years. The Nasdaq Composite still remains roughly a third off its dot-com era highs.

The Dow, a price-weighted average of 30 New York Stock Exchange- and Nasdaq-listed stocks, was first envisioned by Charles Dow in 1896, and is one of the most watched benchmarks in the world. It includes names like 3M, Alcoa, American Express and AT&T.

The benchmark is primarily watched by retail investors, with institutional money more closely tied to the performance of the S&P 500. Still, the Dow's rise should help boost investors' confidence on the economy, as they look for signs that the doldrums of the 2008 credit crisis are indeed in the rearview mirror.

"The fact that it has reached a new high should provide some comfort for the average American investor that the economy is slowly recovering," ConvergEx Chief Market Strategist Nicholas Colas told IndexUniverse.

"It's a nice statistic to have," Colas said. "It's good news about the capital markets after what have been some very difficult four years here."

The SPDR Dow Jones Industrial Average Trust (NYSEArca:DIA), a fund that tracks the Dow, was seeing gains of nearly 1 percent after gapping higher at the opening.

The $11.9 billion fund, which reached its highest share price ever of $142.44 in early trade, has tallied gains of more than 9 percent year-to-date.

Early Tuesday, all of the Dow's 30 components were trending higher, tallying gains of less than 1 percent. Coca-Cola was the only exception, trading both higher and lower early on.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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