Tip:
Highlight text to annotate it
X
(Image source: CNN)
BY STEVEN SPARKMAN
The Dow Jones Industrial Average followed up Tuesday’s all-time high with a repeat
performance, closing at a never-before-seen level.
“There’s the bell. Here we
are closing out at yet another record here for the Dow. … 14,295 looks to be the level,
up about three tenths of one percent.” (Via Bloomberg)
The recent stock surge has
generated tons of excitement, but what’s still unclear is why it’s happening and
what it means.
Many analysts point to Wednesday’s job numbers as part of the explanation.
A payroll processing firm says the U.S. added almost 200,000 jobs in February. (Via ADP
National Employment Report)
The other big factor getting mentioned by business analysts
is the housing market, which shows signs of steady growth in the near future.
“If
you look at the epicenter of the collapse of the housing bubble, Las Vegas, if you look
at it for the past six months or so real estate prices are starting to go up, even in Las
Vegas.” (Via Fox Business)
But before you start popping champagne bottles, the stock
rally could also be due to factors that don’t reflect so well on the U.S. economy.
A
writer for The Economist says: “It is tempting to attribute the strength of the Dow to optimism
about the American economy. Tempting, but wrong...” going on to credit the lack of
any profitable place to invest outside the market as a major reason for the stock climb.
The
Baltimore Sun found an even more pessimistic take, saying there’s probably no good explanation.
“...that
would imply that the market is responding in some logical, thoughtful way to Washington's
political establishment, or even to the economic reality as most of us experience it, and not
the chaotic hurly-burly of global markets and unpredictable investment decision-making.”
But
even if the Dow Jones isn’t a call for patting ourselves on the back, an analyst tells CNN
— at least there’s no bad news.
“There's more and more confidence that the economy
is on firmer footing … It's not growing fast, but it's not about to fall off a cliff
either.”
So will the climb continue? Few analysts have made predictions for Thursday,
but the two other major indexes didn’t fare quite as well as the Dow Wednesday.
“NASDAQ,
close but no cigar. Ended negative today, down one and three quarters points to 3222.
And the S&P 500 also higher, along with the Dow, although it, too, gave up much of the
momentum by the close.” (Via CNBC) do