(AP Photo/Seth Wenig)

NEW YORK, N.Y. - The Dow Jones industrial average crossed 13,000 on Tuesday for the first time since May 2008, when the Lehman Brothers investment bank was solvent, unemployment a healthy 5.4 per cent and the worst of the Great Recession months ahead.

The milestone came about two hours into the trading day. The stock market got the final push from strong corporate earnings reports and a Greek bailout deal intended to prevent the next financial crisis.

The average was above 13,000 for about 30 seconds before dropping back. It later reclaimed the mark just after noon and again just after 1:30, then lost all its gains for the day.

Just before 3 p.m. EST, the Dow was down 11.12 points at 12,938.75. The Standard & Poor's 500, a broader measure of the market, was down two points at 1,359. The Nasdaq composite index was down 16 at 2,935.

Just last summer, the Dow unburdened itself of 2,000 points in three terrifying weeks. S&P downgraded the United States credit rating, Washington was fighting over the federal borrowing limit, and the European debt crisis was raging.

A second recession in the United States was a real fear. But U.S. the economy grew faster every quarter last year, and gains in the job market have been impressive, including 243,000 jobs added in January alone.

"Essentially over the last couple of months you've taken the two biggest fears off the table, that Europe is going to melt down and that we're going to have another recession here," said Scott Brown, chief economist for Raymond James.

The Dow last closed above 13,000 on May 19, 2008. The next day, it crossed under 13,000, not to return for almost four years. The Dow fell as low as 6,547 on March 9, 2009. It has almost doubled since then.

Toronto's S&P/TSX Composite Index at that time would continue to head higher, hitting a close at the 15,073.13 level June 18, its highest-ever.

But the fallout from the financial collapse of 2008 would continue to maul Toronto and New York markets until early March 2009, when indexes began to turn around. The TSX and the Dow both plunged about 50 per cent from those highs to the March lows.

Tuesday, the TSX traded up about 150 points to around the 12,600 mark, its highest level for the year - but still almost 3,000 points below the pre-recession peak.

"I would suggest one of the reasons why here in our market we haven't been able to maintain that kind of momentum is that our index is much more influenced by commodity prices and for the most part commodity prices have been under pressure and they continue to be under pressure," said Fred Ketchen, manager of equity trading at Scotia Capital.

"They're up today and those commodity sectors are higher today but when you look at the year to date here, we are at least showing some progress because our index is up by 5.4 per cent, not a whole lot less than New York where the Dow is up 5.9 per cent. But there is life coming back into the commodity sector and we're starting to see that now."

For the Dow, the 13,000 level is a psychological milestone, but in a market built on perception, it could influence more cautious investors to pump more money back into the stock market, analysts said.

"You need notches along the way to measure things, and that's as good as any," said John Manley, chief equity strategist for Wells Fargo's funds group. "Is 50 older than 49 and a half? Yes, by six months. Do those six months really make a difference? Probably not. But it does give us a fixed point, something we can look at."

Dan McMahon, director of equity trading at Raymond James, called the 13,000 marker a "positive catalyst, and that's what we need to get us through the next range." In the end, he said, it's just "a big round number."

The Dow fell as low as 10,655 in the fall. The 13,000 marker is a 22 per cent rally from that low. The Dow is within 1,200 points of its all-time closing high - 14,164, set Oct. 9, 2007.

From 13,000, it would take a nine per cent rally for the Dow to hit an all-time high. The S&P, a broader reading of the market, would need a bigger rally, 15 per cent from here, to set a record.

Under the bailout deal, Greece will get 130 billion, or about $172 billion, from other European nations and the International Monetary Fund. In a separate deal, it will owe 107 billion less to investors who own its government bonds.

After months of the talks crawling along and vague headlines yanking the market up and down, the conclusion was almost anticlimactic because an agreement was already expected by the markets.

European markets fell after the Greece deal was announced. Stocks were down almost four per cent in Greece, a little more than 1 per cent in Spain and less than one per cent in France and Britain. But the euro rose slightly to $1.32, which could be seen as a sign of confidence in European markets.

Investors noted that Greece remains in deep recession. Its bond investors will take a 53.5 per cent loss on the face value of their bonds, which could discourage future investment.

The U.S. stock market has climbed steadily this year, primarily because of optimism about the economy. High gasoline prices are emerging as a chief concern for the economic recovery for the rest of the year, though.

A gallon of regular costs $3.57 on average, 40 cents more than a year ago and the highest on record for this time of year. With tension building over Iran's nuclear ambitions, Iran has halted oil exports to Britain and France and threatened to stop shipping to other European countries.

The price of oil settled at $106.25, up $2.65 for the day and its highest level since last May. Airline stocks got clobbered. United Continental lost 10 per cent, Delta Air Lines nine per cent. The Dow transportation average lost two per cent.

U.S. markets enjoyed strong earnings reports from several big-name companies, including Home Depot and Dollar Thrifty. An exception was Wal-Mart, which reported a 15 per cent drop in quarterly profits.

Overall, though, investors seemed comfortable moving money into the higher-risk stock market and out of safer investments like government bonds. The yield on the government's benchmark 10-year Treasury note rose to 2.04 per cent from 2.01 per cent Friday, a sign that fewer investors wanted the bonds.

Materials stocks and energy companies led the market higher Tuesday. Health care companies, makers of consumer staples and utilities, traditionally stocks to own in more cautious times, were lower.

Among the big movers:

- Wal-Mart fell four per cent after missing analysts' expectations for revenue and per-share earnings. The world's biggest retailer has lost some of its momentum in the past couple of years with strategic errors. They included a brief foray away from "everyday low prices" and an attempt to declutter its shelves that turned off customers who went there for the convenience.

- Home Depot rose 0.4 per cent after beating analysts' expectations for revenue and per-share earnings. The home-repair company has been hurt by the dour housing market, which has led homeowners to take on fewer expensive home renovations. Warm weather helped drive small-scale home projects in the latest quarter.

- Barnes & Noble fell 0.6 per cent after missing expectations on revenue and per-share earnings. Rising costs offset higher sales of both traditional books and digital books. Investors seemed encouraged that the bookstore chain, a survivor in an era that has felled competitors like Borders and Waldenbooks, plans to introduce a cheaper Nook to compete with Amazon's Kindle Fire.

- Macy's, the department store chain, rose two per cent after beating earnings expectations. The company, which also runs Bloomingdales, was helped by strong holiday sales and more exclusive brands.

- With files from The Canadian Press