Dow Jones, S&P 500 Averages Hit New Multi-Year Highs

By Randy Hall | July 7, 2008 | 8:23 PM EDT

( - Lower gasoline prices and improved consumer confidence helped two of the three major U.S. stock indexes reach their highest levels of the past several years on Tuesday.

The Dow Jones industrial average gained 93.58 points to finish the day at 11,669.39, just 53.59 points from its all-time high of 11,722.98 set in January of 2000. In addition, the Standard & Poor's 500 Index climbed 9.97 points to reach a five-and-a-half-year high of 1,336.34. And while the Nasdaq Composite index didn't set any records Tuesday, it did rise 12.27 points to end the session at 2,261.34.

Two factors were largely responsible for the boost in stocks. The first was the continued decline of gas prices, which have fallen for seven straight weeks and are down an average of 66 cents across the country since hitting a high of $3.04 a gallon on Aug. 7.

On Tuesday, a barrel of light crude oil was listed at $61.01, down 44 cents on the New York Mercantile Exchange, though members of the Organization of Petroleum Exporting Countries (OPEC) have begun discussing cuts in oil production in an effort to stabilize gas prices.

In addition, the New York-based Conference Board said Tuesday that its consumer confidence index rose to 104.5 from a revised reading of 100.2 in August. Analysts had expected the index to climb to 103.

What was notable about the report, Jeff Kleintop, chief investment strategist at PNC Advisors, told CNN, is that although it shows the consumer is feeling better, it doesn't suggest consumer spending is likely to ramp up enough to recharge the economy and force the Federal Reserve to raise rates again.

"The report was good news, showing the consumer is slowing, but not collapsing, even with the slowdown in the housing market," Kleintop said. "For now, it was what the stock market wanted to hear."

The third quarter of 2006 will conclude on Friday, and analysts will be examining reports on the first nine months of the year to predict what effects the economy will have on the Nov. 7 mid-term elections.

In overseas trading, Japan's Nikkei stock average fell less than 1 percent, while Britain's FTSE 100, Germany's DAX index and France's CAC-40 all gained more than 1 percent in Tuesday's session.

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