UPDATE: Sequester? Whatever! Dow Jones Industrial Average Reaches an All-Time High
Despite the ongoing sequester-pocalyse, the Dow Jones Industrial Average has reached an all-time high this morning — 14,216.70, exceeding the previous 14,198.1 high on October 11, 2007.
The stock market high was prompted by word from halfway around the world; China has pledged to inject tons of cash into its economy with the goal of reaching target growth of 7.5 percent. China’s growth fell last year.
On the other hand, investors and consumers basically have a “ho-hum” attitude towards the incessant discord in Washington.
“The stock market and the American public are looking at the political theater with a jaundiced eye,” Ted Weisberg, a New York Stock Exchange trader with 40 years experience tells The Washington Post.
Now, investors are buying stocks and other financial products like there’s no tomorrow. The Wall Street Journal offers a crash course in investor buying and selling behavior in the “bull market” in case you’ve ever wanted to test the waters.
“The Dow Jones industrial average has now erased the 54% loss it suffered in the brutal 2007-2009 bear market,” reports USA Today. The S&P 500 is also nearing record highs. The NASDAQ, however, which is rich in tech companies, is only up one percent and well off its best numbers. Google and Apple are doing pretty well this morning though. The New York Times says that, for Americans, the Dow Jones is the most recognizable of the market indexes with some of the most recognizable companies including Coca Cola and Walmart. So this drives up confidence.
If you would like to get in, get in fast. USAT points out that this positive run has been going on for a few weeks, and has gained 115 percent. Some say investors should proceed with caution, but markets around the world are rising with the occasion. The Dow reached a low point in 2009.
“The focus on profits explains why the stock market can be doing well while most people are not sensing a resurgent economy. A bet on an index like the Dow is effectively a narrow wager on the profits of 30 companies, not necessarily the economic health of average Americans,” Princeton University professor Alan S. Blinder tells the Times.
Update: The Dow kept up its winning ways to close the day at a record high, 14253.77, a level not seen since 2007. “Nearly four years into the recovery from the longest recession since the Great Depression, stocks are riding expanding U.S. factory activity, higher spending by U.S. businesses and consumers and a recovering housing market. Strong service-sector data released Tuesday added to the picture of an improving economy,” writes the Wall Street Journal. Now let’s see what happens tomorrow.