Dow ends above 14,000 for 1st time since Oct. 2007 on jobs report
NEW YORK — The Dow closed above 14,000 on Friday for the first time in more than five years.
It was just a number on a board, but it was enough to raise the hopes of some investors and cause others concern about an overheated market. And it brought reminders of a different era, before the financial crisis rocked the world economy.
The Dow Jones industrial average, a stock market index that is traditionally considered a benchmark for how the entire market is faring, had been rising fairly steadily for about a month. On Friday, strong auto sales and optimism about U.S. job growth pushed it over the mark.
The Dow is now just 155 points away from its record close.
“There's a newfound enthusiasm for the equity market,” said Jim Russell, regional investment director at U.S. Bank Wealth Management in Minneapolis.
Market watchers were divided over what the Dow milestone — or even what a potential new all-time high — really means. To some, it's an important booster to hearts and minds, making investors feel optimistic and thus more willing to bet on the market.
“The Dow touching 14,000, it matters psychologically,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “It attracts smaller investors.”
And those investors, until recently, had been shying away from stocks. Since April 2011, investors have pulled more cash out of U.S. stock mutual funds than they've put in, according to the Investment Company Institute. In the past three weeks, though, that trend has reversed, which could make January the first month in nearly two years in which stock-focused funds had a net inflow.
To others, though, a Dow 14,000 is nothing but a number, a sign more of how traders feel than of the economy. And it's not even the best number on the board, some traders say. Professional investors usually pay more heed to the Standard & Poor's main index, which tracks 500 companies compared with the Dow's 30. The Dow garners attention, they say, because it's more familiar to the general public.
Joe Gordon, managing partner at Gordon Asset Management in North Carolina, was not celebrating on Friday. He thinks the gains won't last. The fact that small investors are finally piling back in the stock market, he said, is not a reason for optimism but a sign that it's getting overhyped and due to fall.
After the Dow hit its all-time record in 2007, it fell almost steadily for the next year and a half. It lost more than half of its value before starting to tick back up again.
“It is good trivia to talk about on television and the radio,” Gordon said, referring to the 14,000 mark. “It's meaningless to the average professional.” And for workers still unemployed by the financial crisis, he said, “it really means nothing to them.”
If there is dissent over what a Dow 14,000 signifies, what's undeniable is that it's a rarefied event.
Before Friday, the Dow had closed above 14,000 just nine times in its history. The first time was in July 2007; the rest were in October of that year.
The last time the Dow closed over that mark was Oct. 12, 2007, when it settled at 14,093.08. It had reached its all-time record, 14,164.53, three days before that.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Safety of credit cards up to banks
- Travelers love to hate cheap airlines
- Volkswagen may compensate vehicle owners for loss of value, CEO says
- PNC fined for paperwork errors on municipal bond offerings
- UAW ups Fiat Chrysler workers’ pay in new proposal
- Majority of House members sign petition calling for vote on Export-Import Bank’s charter
- ‘Coffin-nosed Cord’ was ahead of its time
- 2 Fed members push case for rate hike in ’15
- Miata leaves cutesy behind for sleek
- Stocks wrap best week of year with slight gains
- Koppers CEO believes struggling company can do better, transform