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Dow Jones ekes out another record high, inching toward 17,000: Small caps rally

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The Dow Jones Industrial Average (DJIA) today gained 18.82 points, or 0.1 percent, to a record 16,943.10, said Bloomberg. The Standard & Poor’s 500 Index (SPX) added 0.1 percent to 1,951.27 at 4 p.m. in New York, capping its seventh record close in the past eight sessions. The Russell 2000 Index of small companies climbed 0.9 percent for a fourth day of gains. The Russell 2000 has advanced 4.4 percent in the past four sessions to the highest since April 3, Bloomberg said. The gauge of small cap stocks has rallied 7.5 percent from a February low and is now up 1 percent in 2014. However, the volume of stocks traded hit 5.3 billion shares, 15 percent below the three-month average.

Tyson Foods Inc. fell 6.5 percent after the company said it made a binding offer for Hillshire Brands Co. Apple Inc. traded at $93.70, reflecting a seven-for-one stock split.

In other stock news, Family Dollar jumped 13 percent as a filing showed Carl Icahn has amassed a 9.4 percent stake. Analog Devices jumped 5 percent after agreeing to buy a chipmaker for about $2 billion. Idenix Pharmaceuticals Inc. more than tripled after Merck & Co. agreed to buy the drugmaker for $3.9 billion.

This is a continuation of the "Obama Stock Market," as the Dow and the S&P 500 have continued on its meteoric rise. On President Obama's first inauguration day on Jan. 20, 2009, the DJIA was sitting at 7,949.09. It then bottomed on March 9, 2009 at 6,547.05, which at the time was its lowest level since 1997.

The Chicago Board Options Exchange Volatility Index (VIX) climbed 3.9 percent to 11.15. The gauge, known as the VIX, fell 5.9 percent last week to 10.73, the lowest level since February 2007.

"Growth is slow, GDP is slow, we have rate cuts all around, and we’re banking that all-time highs are going to get better," Keith Rosendahl, chief investment strategist at Venice, Florida-based research firm Interactive Portfolio, LLC, said in a phone interview. "With the merger activity, I think people are trying to buy growth."

Apple shares climbed 1.6 percent to $93.70. The shares closed Friday at $645.57. Apple said on April 23 it was doing the split of seven-to-one, so shares would be available to a wider pool of investors.

In overseas trading, Asian stocks rose, with the regional benchmark index gaining a fourth day, after U.S. shares climbed to a fresh record on Monday, said Bloomberg. The MSCI Asia Pacific Index rose 0.1 percent to 143.67 as of 9:57 a.m. in Hong Kong.

"Markets aren’t likely to fall unless economic data disappoint," Toby Lawson, head of futures, options and cash equities trading for Asia Pacific at Newedge Group SA in Sydney, told Bloomberg by phone. "Recent Chinese data looked OK. The government has got the capacity to smooth growth lines if necessary."

Sources:

Bloomberg - U.S. Stocks Rise to Records Amid Small-Cap Rally, Deals

Bloomberg - Asian Stocks Follow U.S. Shares Higher; Casinos Slump

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