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Is there anyone who expected the Dow Jones Industrial Average to ever surpass its record intraday high of 14,198.40, after taking a 54% hit and bottoming at 6547.05 in March 2009?
The Dow jumped more than 100 points this morning, reaching 1535.31. All eyes will now be on how the index makes it through the end of the day. The current record high close is 14,164.53.
All the usual questions are now being resurrected. Will the climb continue? Will investors shake of their concerns of the past five years or will they continue to doubt the stability of the market? What damage will sequestration do? (Okay, I agree, that’s not a usual question.) How will small investors react? This question is important because, whilst corporate profits are on the rise, wage earners are still being squeezed.
The market at large is back to where it was a decade ago, but there has been, at least up until today, comparatively less enthusiasm about it as observers wonder if the market will continue to increase or if it is ready to nosedive again. Opinions are as plentiful as ever. It’s really a question of optimism or pessimism. One analyst has said that the question being asked by investors is “Am I being too conservative in this new bull market?” Another is warning that investors should understand that they are skating on thin ice and that “the ice is softening and they should be listening for cracks.”
Federal Reserve Chairman Ben Bernanke said “The Federal Reserve is here and is going to do everything possible to support this recovery.” Of course he said that in 2009. Nonetheless, economist David Rosenberg observed that “So long as the Fed is in an accommodating mode and the economy is out of recession, the odds are that you will have a bull market.” The future, as always, remains to be seem.
Only one of the thirty stocks in the Dow, United Healthcare, was trading lower this morning.
