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.
A point of reference: This article 'equates' index number and 'value'.    "The benchmark is not far from its all-time high . . . .shed nearly 40 percent of its value."    Index high and value:    They are not the same. Â
Oct 9, 2007:
   Dow:  14,164.53
   Gold:    1,048
   Silver         13.45
Today:
   Dow:  14,009.79               $ 0.99 on the dollar of thenÂ
   Gold:    1,662                      $1.59 on the dollar of then
   Silver          31.63                $2.35 on the dollar of then
If you had $14k in the market in 2007, it would be worth $14k today.
If you had $14k in gold in 2007, it would be worth $22.26k today
If you had $14k in silver in 2007, it would be worth $32.92k today.
And look at the CPI, yes, it was flat in 2008, but it resumed its march in '09.  http://inflationdata.com/inflation/Consumer_Price_Index/HistoricalCPI.aspx?reloaded=true
CPI = 207 in 2007;  CPI=229 last December.   That's an 11 % increase through the Great Recession.    So we are behind.Â
So what cost you $1.00 in 2007, would cost you $1.11 today.  And the market is still under water.
You've read about "the lost decade' for those in Japan for the '90's.   This is ours.
And this is not doom and gloom: It is purely fact:  From our Government..  Now think about added debt.
The problem is that if the market wouldn't have crashed in the first place, we'd all be in the chips right now. Â In reality, we aren't even back to breaking even.
 So, all this good news is just white washing the truth and that is we are still in deep doo doo.  Now, don't be surprised that come sometime next week, something will set the wall street crooks into a selling frenzy and the stocks will fall just as fast as they rose.  Nothing has been done to prevent the things that caused the recession in the first place, from happening again.  Don't forget that the politicians are exempt from the same laws that regular citizens have to abide by.  They were and probably are still allowed to be involved in  insider trading.  The average guy out there could go to prison if he did the same thing.  In other words,  if the politicians would have done their jobs instead of sleeping with the enemy, your investments would be five years ahead of where they are now.
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It's a bubble. It will pop.
@RalphCramden everything is doom and gloom with you, isn't it. I'm betting if Romney was President right now (Thank god he's not) you would be overjoyed with 14k on the DOW.
 @Ramsesthegreat Â
See, that's where you go wrong. You assume that I am a doom and gloom guy. In reality I am a realist.
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I am making a bunch of money betting that Apple stock will go down. In fact my CPA says that I will be in the maximum tax bracket this year if I sell those stocks.
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When I see a glass I want to know the total volume it will hold. Then I want to know how much is in the glass. Finally I want to know if the volume it trending up or trending down. For me it is all about numbers.
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If Romney was president nothing would change. He would spend just like every other president has in the last 40 years. Our debt is now out of control and there is no hope if it getting under control. Politicians have created a monster.
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As the baby boomers retire at every greater numbers, currently at 10,000 per day for the next 20 years, the demand for SS and Medicare will more than double. Currently there is about 16% of the population getting SS and Medicare. Within the next few years that number will climb to over 33% getting SS and Medicare.
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The EU is in recession and it is getting worse. That will affect us. In that there is no doubt. We have already had one quarter of negative growth. All we need is another and we are officially in a recession. Expect it to happen next quarter and watch the unemployment climb.
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People who ignore these facts do so at their own risk.