Start the conversation
The Dow Jones Industrial Average closed above 13000 yesterday (Tuesday) for the first time since May 19, 2008, as investors remain optimistic amid global economic unease.
The Dow gained 0.18%, or 23.61 points, to close just above the mark at 13005.12.
The Dow's been flirting with a close above 13000 for a week now. The market has climbed despite concerns surrounding Greece as well as the continued U.S. economic recovery.
"Don't forget that it's absolutely possible to have the markets move independently of the economy, and that's what traders are banking on," Money Morning Chief Investment Strategist Keith Fitz-Gerald told Stuart Varney on a Fox Business appearance last week.
The gain represents about a 25% increase since the Dow touched its 2011 low of 10404 in October. The Standard & Poor's 500 Index is trading at its highest levels since June 2008, and the Nasdaq Composite is trading at its highest point since December 2000.
Dow Jones Industrial Average
The Dow Closed Above 13000:
The Dow at 13000 is only 8.9% from its all-time high of 14174.53, reached on October 9, 2007. Now the question is if the Dow can ride investor momentum to test its record.
"People can see that the markets bounce back and are resilient over time," Marc Scudillo, managing officer at EisnerAmper, told USA Today. "That's a powerful message."
If investors continue to hear positive economic reports, the Dow could test its all-time high. A consumer confidence report released Tuesday morning helped push the Dow over 13000 and keep it there most of the day. Consumer confidence in February hit its highest level in a year.
"Two months ago, we were talking about a double-dip recession. Now consumer confidence is growing," Ryan Detrick, senior technical strategist for Schaffer's Investment Research, told USA Today. "A major milestone like 13,000 wakes up a lot of investors who have missed a lot of this rally."
The Dow pushing through the psychological barrier of 13000 will likely help fuel this rally – but investors could let concerns over higher oil and gas prices disrupt a climb to 14000. Gas prices are headed for record highs this year, and oil could hit $200 a barrel.
While the Dow closed above 13000, the S&P 500 closed up 4.59 points, or 0.34%, at 1372.18, and the Nasdaq closed up 21 points, or 0.7%, to 2987.
News and Related Story Links:
- Money Morning:
The Dow Hit 13,000 – Will it Stick?
- Money Morning:
Buy, Sell or Hold: 100 Billion Reasons To Buy Apple Stock
- USA Today:
Dow crosses 13,000, first time since crisis