Dow hits 14,000 for first time since 2007
NEW YORK (AP) - The Dow Jones industrial average briefly topped 14,000 on Friday morning, a milestone not seen since before the financial crisis rocked the markets and the world economy.
After rising steadily in early trading thanks to the U.S. jobs report, the Dow briefly crossed 14,000 around 10:07 a.m. EST. The milestone was by a hair - the highest the Dow reached was 14,000.97 - and it lasted only a moment. The index was trading around 13,980 shortly afterward. The other major stock indexes were also up.
The Dow has crossed 14,000 only 15 times in its history. The last time was Oct. 17, 2007.
If the gains hold and it closes above 14,000 on Friday, that would put it in even more rarefied territory: On just nine of those days did it manage to close above 14,000 at the end of trading.
That time more than five years ago seems almost a different era - before signs of the devastating financial crisis were apparent to the average observer.
Lehman Brothers still existed. So did Bear Stearns, Wachovia and Washington Mutual. Housing prices were starting to ebb, but they hadn't cratered. The unemployment rate was 4.7 percent, meaning jobs were abundant.
The benchmark is not far from its all-time high, 14,164.53, which it reached on Oct. 9, 2007. A year later, in the depths of the financial crisis, it had shed nearly 40 percent of its value.
The Dow is an index of 30 big companies, and its purpose is to represent how the broader stock market is faring. And while hitting 14,000 would be an important psychological milestone, it wouldn't be much else.
The stock market is more a representation of how traders are feeling about the economy than the economy's underlying fundamentals. And many investors don't even think the Dow is the best way to track the market: They prefer the much bigger Standard & Poor's benchmark index, which follows 500 companies, because they think it represents a more accurate view of the economy.
"You can hit these milestones, but then it can always end badly," said Joe Gordon, managing partner at Gordon Asset Management in North Carolina. The fact that small investors are finally getting back in the stock market, he said, makes him think that stocks are due for a downturn.
"It's meaningless to the average professional," said Gordon, referring to the 14,000 benchmark. And for workers still unemployed by the financial crisis, he said, "it really means nothing to them."
At midmorning, the Dow was up 119 points to 13,980. The Standard & Poor's 500 rose 10 to 1,508. The Nasdaq composite index was up 19 to 3,161.
Overall, the government jobs report that pushed stocks forward was mixed, but traders chose to focus on the positive. The U.S. said it added 157,000 jobs in January, which was in line with what traders had been expecting. Unemployment inched up to 7.9 percent from 7.8 percent in December. But, encouragingly, the government also reported that hiring over the past two years has been higher than it originally thought.
The jobs number is based on a survey of employers, and the unemployment rate is based on a separate survey of households, which is why they can diverge.
In Europe, tentative and incremental signs of a recovery were enough to push up stocks in France, Britain and Germany. December unemployment in the European Union was lower than analysts had feared, inflation unexpectedly fell, and a survey raised hopes of some growth in the manufacturing sector.
But there were also reminders that the debt problem is far from solved. The Netherlands was also forced to take over one of its major banks, to try to stave off a collapse. In Greece, dock workers extended a strike over the government's spending cuts.
Among companies making big moves:
• Drugmaker Merck fell nearly 3 percent, down $1.22 to $42.02. Its fourth-quarter profit suffered because of competition from generic medicines against its blockbuster allergy drug Singulair.
• Insurance company MetLife rose more than 1 percent, up 52 cents to $37.86, after saying it plans to buy the largest private pension fund administrator in Chile.
• Zoetis, an animal health business that Pfizer just spun off, made its debut on the stock market. It was up 18 percent, rising $4.63 to $30.62.
After rising steadily in early trading thanks to the U.S. jobs report, the Dow briefly crossed 14,000 around 10:07 a.m. EST. The milestone was by a hair - the highest the Dow reached was 14,000.97 - and it lasted only a moment. The index was trading around 13,980 shortly afterward. The other major stock indexes were also up.
The Dow has crossed 14,000 only 15 times in its history. The last time was Oct. 17, 2007.
If the gains hold and it closes above 14,000 on Friday, that would put it in even more rarefied territory: On just nine of those days did it manage to close above 14,000 at the end of trading.
That time more than five years ago seems almost a different era - before signs of the devastating financial crisis were apparent to the average observer.
Lehman Brothers still existed. So did Bear Stearns, Wachovia and Washington Mutual. Housing prices were starting to ebb, but they hadn't cratered. The unemployment rate was 4.7 percent, meaning jobs were abundant.
The benchmark is not far from its all-time high, 14,164.53, which it reached on Oct. 9, 2007. A year later, in the depths of the financial crisis, it had shed nearly 40 percent of its value.
The Dow is an index of 30 big companies, and its purpose is to represent how the broader stock market is faring. And while hitting 14,000 would be an important psychological milestone, it wouldn't be much else.
The stock market is more a representation of how traders are feeling about the economy than the economy's underlying fundamentals. And many investors don't even think the Dow is the best way to track the market: They prefer the much bigger Standard & Poor's benchmark index, which follows 500 companies, because they think it represents a more accurate view of the economy.
"You can hit these milestones, but then it can always end badly," said Joe Gordon, managing partner at Gordon Asset Management in North Carolina. The fact that small investors are finally getting back in the stock market, he said, makes him think that stocks are due for a downturn.
"It's meaningless to the average professional," said Gordon, referring to the 14,000 benchmark. And for workers still unemployed by the financial crisis, he said, "it really means nothing to them."
At midmorning, the Dow was up 119 points to 13,980. The Standard & Poor's 500 rose 10 to 1,508. The Nasdaq composite index was up 19 to 3,161.
Overall, the government jobs report that pushed stocks forward was mixed, but traders chose to focus on the positive. The U.S. said it added 157,000 jobs in January, which was in line with what traders had been expecting. Unemployment inched up to 7.9 percent from 7.8 percent in December. But, encouragingly, the government also reported that hiring over the past two years has been higher than it originally thought.
The jobs number is based on a survey of employers, and the unemployment rate is based on a separate survey of households, which is why they can diverge.
In Europe, tentative and incremental signs of a recovery were enough to push up stocks in France, Britain and Germany. December unemployment in the European Union was lower than analysts had feared, inflation unexpectedly fell, and a survey raised hopes of some growth in the manufacturing sector.
But there were also reminders that the debt problem is far from solved. The Netherlands was also forced to take over one of its major banks, to try to stave off a collapse. In Greece, dock workers extended a strike over the government's spending cuts.
Among companies making big moves:
• Drugmaker Merck fell nearly 3 percent, down $1.22 to $42.02. Its fourth-quarter profit suffered because of competition from generic medicines against its blockbuster allergy drug Singulair.
• Insurance company MetLife rose more than 1 percent, up 52 cents to $37.86, after saying it plans to buy the largest private pension fund administrator in Chile.
• Zoetis, an animal health business that Pfizer just spun off, made its debut on the stock market. It was up 18 percent, rising $4.63 to $30.62.
Funny how you can hear crickets in the good news reports which by the way are becoming much more common than the other type....
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Credit Obama and his policies which take into consideration the middle class before the wealthy class which as I have always said will be the one thing that ensures our economy is successful.
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 @sunnysandiego Relying on the dow now are we?
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Why is it then as the dow hits 14,000 and the S&P 500 hit 1,500 the typical American is losing their confidence and also reflects a stock market that diverges from the interests of the US worker? Given that many of the S&P 500 companies earn a sizable portion of their profits abroad, it is hard to see a direct correlation to the health of the American worker and the stock market. The US middle class continues to face a difficult future after 6 years of non stop misery. It is interesting to see consumer confidence fall while stock prices move up. But what I do see is a growing class of US workers stuck in poverty. The startling high number of Americans on food stamps does not seem to be inching lower (we are over 47 million). Yet corporate profits are at record levels. Goldman Sachs earned $2.8 billion in the fourth quarter of 2012. How is it feasible that stocks continue to move higher in a consumer based economy while real wealth gains to working and middle class Americans seem stagnant (Actually moving backwards for 30 years) and unemployment is increasing?
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So you really want to cheer that we are still 4 million jobs down since '08 and the stock market has recovered everything despite the high unemployment? That is a bad sign, not a good sign. Consumer confidence and the market have always stayed in lockstep until '12. Could it be that the big money is using hot money fresh of the presses to make their profits on? How does that translate into anything good for a worker in a consumer based economy?
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Home values are still down 30%, why is the stack market not reflecting the bane of US homeowners? GDP is down, unemployment , poverty, food stamps up. You sure you want to try and convince anyone beside crickets that the stock market is a good indicator of middle class american workers?
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Many corporations used the recession as a method of cutting wages and firing employees to boost their stock profits. This is seen when you examine the financial statements of many of these organizations.
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These are but a few of the fundamentals or, facts that point to a certain collapse of this economy and it will be far worse then '07 this time around and its coming soon.
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You really need to do some homework and stop relying on what they feed you. You sound utterly ridiculous.
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