Dow breaks 13,000 for first time since ‘08 crisis

NEW YORK — It came and went in a flash each time, a number on a board for mere seconds, but its symbolic power couldn’t be dismissed.

The Dow Jones industrial average, powered higher all year by optimism that the economic recovery is finally for real, crossed 13,000 on Tuesday for the first time since May 2008.

The last time the Dow was there, unemployment was 5.4 percent, and Lehman Brothers was a solvent investment bank. Financial crises happened in other countries, or the history books.

The milestone Tuesday came about two hours into the trading day. The Dow was above 13,000 for about 30 seconds, and for slightly longer at about noon and 1:30 p.m., but couldn’t hold its gains. It finished up 15.82 points at 12,965.69.

Still, Wall Street took note of the marker.

It was just last summer that the Dow unburdened itself of 2,000 points in three terrifying weeks. Standard & Poor’s downgraded the United States’ credit rating, Washington was fighting over the federal borrowing limit, and the European debt crisis was raging.

A second recession in the United States was a real fear. But the economy grew faster every quarter last year, and gains in the job market have been impressive, including 243,000 jobs added in January alone.

“Essentially over the last couple of months you’ve taken the two biggest fears off the table, that Europe is going to melt down and that we’re going to have another recession here,” said Scott Brown, chief economist for Raymond James.

The tumult of last summer and fall left the Dow as low as 10,655. It closed Tuesday 22 percent above that low. The Dow is 1,199 points from an all-time high, a 9 percent rally from here.

A long-awaited bailout to help Greece prevent a potentially catastrophic default, announced before dawn in Europe after 12 hours of talks, helped the Dow clear 13,000.

Greece will get €130 billion, or about $172 billion, from other European nations and the International Monetary Fund. In a separate deal, investors in Greek bonds will be asked to forgive €107 billion in debt.

After months in which talks crawled along and vague headlines yanked the market up and down, the conclusion was almost anticlimactic because the markets were already expecting an agreement.

European markets didn’t take the news as well. Stocks closed down 3.5 percent in Greece, where stocks have lost 80 percent of their value since 2007. Stocks declined less than 1 percent Tuesday in Germany, France and Britain.

Investors noted that Greece remains in a deep recession. Its bond investors will take a 53.5 percent loss on the face value of their bonds, which could discourage future investment.

In the U.S., investors were cheered early by earnings from Home Depot, watched closely as a barometer of American spending on homes, and Macy’s. Wal-Mart missed Wall Street expectations, and its stock lost 4 percent, worst among the 30 stocks in the Dow.

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