By Jerry Knight
Washington Post Staff Writer
Monday, January 9, 2006 4:24 PM
The Dow Jones industrial average today topped the 11,000 mark for the first time since before the Sept. 11, 2001, terror attacks as the blue chip Dow index struggled to catch up with other measures of the market.
While stock trading mavens declared that hitting the 11,000 mark will draw investors back into stocks, the immediate impact was to kick the Dow into reverse.
Within an hour after the Dow topped that mark, the predictable sell-off began. Surprisingly, however, the Dow rebounded. Ending the session above 11,000 for the first time since June 2001, the Dow closed up 53 points as 11,011.90.
The Standard & Poor's 500 stock index gained 5 points to 1,290.15.
The Nasdaq Stock Market composite index rose 13 points to 2,318.69.
In the past week, the market has been much more generous to investors than it was last year. The Dow lost 0.6 percent during 2005 and at today's close was up 2.7 percent so far this year.
The Nasdaq composite, up 5 percent, and S&P, up more than 3 percent, also have exceeded last year's advance.
While the usual flow of fresh funds into stocks at the beginning of the new year frequently drives the market higher, the rapid advance is being viewed with caution. There is little evidence that investment conditions have changed much in the past week, prompting predictions that that market likely will retreat some more.
The precariousness of the Dow's morning peak should have been obvious to anyone who looked at what was moving the index higher -- the biggest gainer among the 30 Dow stocks was General Motors.
This morning, GM executives at the Detroit Auto Show were assuring analysts and writers that the company's new sport utility vehicles will be big sellers. And, they promised, GM will lose a lot less money this year -- after it closes plants, slashes costs and then cuts car prices.
Word out of Detroit was that GM is about to announce across-the-board price cuts on almost all its models. Basically, the company plans to cut sticker prices back to what the cars actually sell for after the usual discounts and deals are taken off the list price.