(The following story by Rick Babson appeared on The Kansas City Star website on April 19.)
KANSAS CITY — Investors pushed the Dow Jones industrial average past 12,800 for the first time and to a record close as Kansas City Southern rode the rails to a 52-week high.
The rail holding company closed up 2.5 percent Wednesday after jumping to a high of $38.95, joining other rail companies on the upside despite an earnings miss by CSX Corp. after markets closed Tuesday.
Although Jacksonville, Fla.-based CSX missed Wall Street estimates by a penny a share, investors liked the fact that the company said continued strong pricing boosted revenue by 4 percent despite a 4 percent drop in freight volume.
In a note to clients, Bear Stearns analyst Edward Wolfe said rail industry “pricing has remained firm, which we believe is a strong positive for all the rails.”
Kansas City Southern, which reports quarterly results next week, closed at $38.71, up 97 cents, or 2.57 percent. The previous high of $38.45 was set April 12.
CSX hit a record high of $46.23 before closing at $44.56, up $1.23, or 2.84 percent. Union Pacific, the nation’s largest railroad, reports earnings today. Union Pacific reached a record of $115.25 and closed at $113.78, up $3.32, or 2.01 percent.
Although the Dow closed above 12,800 for the first time, the day was not a standout for the overall market. Tech stocks lagged after disappointing earnings from leaders including Yahoo Inc.
The Dow moved as high as 12,838.46 before slipping back slightly and closing at 12,803.84, breaking records set on Feb. 20. The index of blue-chip stocks closed up 30.80 points, or 0.24 percent.
As only 11 of the 30 stocks in the blue chip index advanced, the Dow’s gain Wednesday came from strength in stocks like JP Morgan Chase & Co., Boeing Co. and Caterpillar Inc.
JPMorgan lifted the Dow after the bank reported a 55 percent jump in profits. JPMorgan rose $1.89, or 3.8 percent, to $52.07. The companies that make up the Dow — nearly half of which report earnings this week — have been mostly beating predictions.
The Standard & Poor’s 500 index gained 1.02, or 0.07 percent, and closed at 1,472.50. The Nasdaq composite index fell 6.45 points, or 0.26 percent, and closed at 2,510.50.
Investors pulled back from tech stocks after Yahoo posted a surprising 11 percent drop in its first-quarter profit. Yahoo plunged $3.78, or 11.8 percent, to $28.31.
Charlie White, chief investment officer of the Thomas-Lloyd Funds, said investors are awaiting signs about where the economy is headed.
“It’s one of these periods of time that you don’t have any compelling evidence either way, and what you need to do is stay focused and be patient,” he told The Associated Press.
Internet phone company Vonage’s shares dived 6 percent, 20 cents a share, to $3.11 after the company said it could be pushed into bankruptcy if it didn’t win an appeal in its patent dispute with Verizon.
Vonage’s stock got a temporary boost earlier in the week from a rumor that Sprint Nextel Corp. was considering buying the company, but several analysts said such a deal wouldn’t make much sense for Sprint, which gained 23 cents, or 1.13 percent, to $20.54.
Cerner Corp. was down 70 cents, or 1.27 percent, at $54.30. Shares dropped ahead of the company’s first-quarter earnings report, which will come after markets close today.
H&R Block Inc. was up 6 cents at $21.81. Block is scheduled to make an interim report on the just-completed 2007 tax season today.