(Thumbnail image from KSFY)
“Traders celebrated when the Dow Touched 10,000. 'Dow 10,000 on the way down wasn’t as fun as Dow 10,000 on the way up.' It may be just a number, but it’s also a symbol of how much things have improved, at least on Wall Street.” (ABC)
“The Dow back above 10,000 today, first time in a year. Now that’s not a huge feat, but considering where we were a year ago, a welcome one.” (FOX News)
This week, the Dow climbed back to 10,000. Some on Wall Street see this as a good sign of things to come, much like the year 1999. That's when the Dow first reached the five-digit level. Others are more hesitant.
We are looking at perspectives from Reuters, CBS, The Wall Street Journal, KCNC, BusinessWeek and The National Business Review.
We first turn to Reuters and CBS, where some on Wall Street explain why they consider the climb above 10,000 significant.
“The Dow as an instrument is really a forward looking indicator. And what it’s basically telling us, one has to assume, is that it sees an economy that will in fact be improving.” (Reuters)
“It's like ringing a bell for the folks that don’t watch this market everyday, to let them now know things are now getting better both in the market and in the economy and maybe it's time to start looking at stocks again.” (CBS)
The Wall Street Journal takes a more cautious approach, noting that the Dow tracks large business. The Journal says those earn more money and can afford to hire workers if they want to, while small businesses are seeing the complete opposite. According to government statistics, smaller businesses provide over half of the private sector jobs in the U.S.
“The Dow which includes 30 of the biggest and most successful companies, is up about 50% from its bottom in March. The NFIB index, which represents about 350,000 small firms, is up about 10%.”
Denver’s CBS affiliate KCNC puts the current five-digit Dow level in perspective to the first time it was reached.
“With inflation 10,000 isn’t even 10,000 anymore. It was worth over 20 percent more back in 1999...'Not much!'”
And as inflation increases, so has the unemployment rate which is close to 10 percent. When the Dow is placed next to other indexes though, the National Business Review thinks 10,000 does mean something.
“The S&P 500 index, for example, has rallied some 60% from its March 9 low. The Nasdaq Composite is up 70% from its low.”
Finally, a director for the brokerage and research firm BayCrest Partners tells BusinessWeek dismissing the 10,000 mark is a mistake.
“Anyone who thinks this is irrelevant is likely a fool. Dow 10,000 magnetizes prices towards it for many months if not years to come once it’s breached.”
Does the Dow reaching the 10,000 mark mean the economy is recovering?
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