The Dow Closes In on All-Time High
After a slow start today, the Dow Jones Industrial Average finished strong to close out the day with a gain of 38 points, or 0.3%. News out of China had markets down in the morning as Beijing announced strict controls to ease skyrocketing housing prices in the world's No. 2 economy. The government said that it would begin charging a 20% capital gains tax on existing properties and implement other restrictions such as raising borrowing rates and increasing minimums for down payments. The move could slow down the construction boom in China and manufacturing and materials companies that rely on new construction. Caterpillar finished down 1.8% on the news, while Alcoa dropped 1.1% as both are highly dependent on the Chinese market.
Retail stocks led the Dow higher in the afternoon as Wal-Mart topped the leaderboard with a 2.1% gain. The world's largest retailer seemed to get a boost from Wal-Mart Foundation President Sylvia Matthews Burrell being named the new chief of the Office of Management and Budget, the White House's budget arm. Burrell has served in several other government posts including as OMB deputy director under President Clinton. The retailer also said it would add 4.7 megawatts of solar power at its Ohio stores, making it that state's largest consumer of the alternative energy source.
Home Depot also gained 1.8% on a day that the retail sector outperformed. There was no company-specific news out on the home-improvement retailer, but it continued to push its all-time high higher on the recent wave of strong news in the housing sector. The retailer will not be affected by today's developments in China as it announced last year that it would leave its fledgling operation in the country and close its last seven stores there.
Late in the day, House Republicans introduced a plan to would save certain agencies, including the FBI and key parts of the military, from the budget cuts signed by President Obama signed on Friday. J.C Penney's woes also continued as the troubled retailer fell 5.3% during the trading session and another 2.1% after hours on word that Vornado Realty Trust is looking to sell 10 million of its 18.6 million shares in the retailer at an asking price between $16.40 and $16.60. With J.C. Penney's total shares outstanding at 219.5 million, the stake for sale represents nearly 5% of the company.
Finally, with Asian markets opening higher, the Dow could break its intraday record of 14,198 as early as tomorrow morning.
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The article The Dow Closes In on All-Time High originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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