Market Rally Continues as Dow Surpasses 11,000

Strategic Insights -

The Dow Jones industrial average eclipsed 11,000 for the first time in over four years, as expectations of stable interest rates and a fresh inflow of retirement investments buoyed the market. Boston Scientific topped Johnson & Johnson's bid for Guidant, the maker of implantable heart devices, and Apple Computer was hailed as a blisteringly hot tech stock, selling 14 million iPods in the last quarter of 2005. Meanwhile, General Motors scrambled to regain market share by reducing prices on 57 of its 76 models, and China's economy surpassed those of France and Italy, with a record $102 billion trade surplus.

Key Takeaways:

  • Boston Scientific agreed to pay about $25 billion for Guidant, a maker of implantable heart devices, after increasing its bid in response to Johnson & Johnson's revised offer of $24.2 billion.
  • The Dow Jones industrial average surpassed 11,000 for the first time in over four years, staying there for several days before being pulled back by resurgent energy prices and doubts about some blue-chip members of the index.
  • General Motors reduced prices on 57 of its 76 models by an average of about $1,300 as it struggles to regain market share.
  • Apple Computer sold 14 million iPods in the last quarter of 2005, more than three times the number sold during the same period a year earlier.
  • China's economy surpassed those of France and Italy, and its trade surplus tripled in 2005 to a record $102 billion.
  • Chinese trade surplus with the United States also reached a record last year, climbing 43 percent to $114.7 billion.
  • Apple's revenue over the last quarter of 2005 soared 63 percent to $5.7 billion, and it sold 1.25 million Macintosh computers in the quarter despite analyst worries that consumers would delay buying Macs.

Statistics:

  • The Dow Jones industrial average closed at 10,959.87 yesterday.
  • Boston Scientific agreed to pay about $25 billion for Guidant.
  • Johnson & Johnson revised its bid for Guidant to $24.2 billion.
  • General Motors reduced prices on 57 of its 76 models by an average of about $1,300.
  • Apple sold 14 million iPods in the last quarter of 2005.
  • China's trade surplus tripled in 2005 to a record $102 billion.
  • Chinese trade surplus with the United States also reached a record last year, climbing 43 percent to $114.7 billion.
  • Apple's revenue over the last quarter of 2005 soared 63 percent to $5.7 billion.

Sources:

  • "Boston Scientific Tops Johnson & Johnson's Bid for Guidant" by NYTimes
  • "Dow Jones Industrial Average Surpasses 11,000" by NYTimes
  • "General Motors Reduces Prices on 57 Models" by NYTimes
  • "Apple's Revenue Soars 63 Percent" by NYTimes
  • "China's Trade Surplus Triples to Record $102 Billion" by NYTimes
  • "Chinese Trade Surplus with U.S. Reaches Record" by NYTimes