Record high: Dow Jones bursts through 25000 points

The milestone came five weeks after its first close above 24000. Some analysts predict more gains considering strong global economic growth and good prospects for higher company earnings. 

|
Mark Lennihan/AP
Stock trader Peter Tuchman wears a Dow 25,000 hat on Jan. 4, 2018, at the New York Stock Exchange. The Dow Jones industrial average closed above 25,000 points for the first time, just five weeks after its first close above 24,000.

The Dow Jones industrial average burst through the 25000 point mark Thursday, just five weeks after its first close above 24000.

The Dow passed five 1000-point barriers in 2017 on its way to a 25 percent gain for the year, as an eight-year rally since the Great Recession continued to confound skeptics.

Strong global economic growth and good prospects for higher company earnings have analysts predicting more gains, although the market may not stay as calm as it has been recently.

The Dow has made a rapid trip from 24000 points on November 30, partly on enthusiasm over passage of the Republican-backed tax package, which could boost company profits this year with across-the-board cuts to corporate taxes.

"For a long while in 2017 I would say the biggest driver was excitement and anticipation over tax reform, but at a certain point I think there was a handover to global economic growth really helping to carry the stock market," said Invesco Chief Global Markets Strategist Kristina Hooper.

Big gains in United States blue chip companies have powered the Dow's relentless rise to new heights over the past year, including an 87 percent gain in aerospace giant Boeing, a 70 percent rise in construction equipment maker Caterpillar, and a 49 percent increase in Apple.

The Dow, which was founded in 1896 and is the oldest barometer of the US stock market, has nearly quadrupled in value from its low during the financial crisis in early 2009. But the global economy and spending by people and businesses and governments were much slower to recover than stocks were.

"Instead of fiscal stimulus, we relied on monetary policy stimulus, which inflates asset prices as opposed to the overall economy," Ms. Hooper said. Stocks have continued to climb as investors saw signs economic growth was finally improving.

Technology companies, which put up some of the biggest gains in the last year, continued to lead the market higher. And there was more good economic news Thursday: A report showed private US businesses added 250,000 jobs last month, with smaller businesses adding 94,000.

The Dow, which tracks 30 big US companies, rose 152.45 points, or 0.6 percent, to 25,075.13.

The Standard & Poor's 500, a much broader index that professional investors prefer to use as their benchmark for large US stocks, rose 10.93 points, or 0.4 percent, to 2,723.99.

The Nasdaq composite, which is heavily weighted with technology and biotech companies, added 12.38 points, or 0.2 percent, to 7077.91. All three indexes set record highs a day earlier.

The Nasdaq reached a milestone of its own this week, closing above 7000 points for the first time Tuesday.

Indexes in some developing countries have done even better than those in Europe and the US over the past year. Brazil's benchmark Bovespa is up 28 percent over the past year and the Hang Seng index in Hong Kong is up 39 percent.

Bond prices fell, sending yields higher. The yield on the 10-year Treasury note rose to 2.45 percent from 2.44 percent. Higher bond yields are good news for banks because they can charge higher interest rates on mortgages and other kinds of loans.

President Trump said Thursday that the Dow could reach 30000, which would take another 20-percent jump. Few on Wall Street expect stocks to climb that much any time soon. Stocks already did far better than most observers expected last year, and corporate earnings aren't rising fast enough to justify that kind of climb.

This story was reported by The Associated Press. 

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Record high: Dow Jones bursts through 25000 points
Read this article in
https://www.csmonitor.com/Business/2018/0105/Record-high-Dow-Jones-bursts-through-25000-points
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe