New stock market milestone: Dow 15,000
NEW YORK — Just two months after recovering the last of its losses from the financial crisis, the Dow Jones industrial average charged higher Tuesday, closing above 15,000 for the first time.
The Dow through the years
NEW YORK — The Dow Jones industrial average often makes headlines. But let’s not forget everything else that happened as the Dow has twisted and turned — from The Muppets suing Mickey Mouse to John McCain meeting Joe the Plumber.May 26, 1896: The Dow Jones industrial average debuts with 12 companies, including American Tobacco, Distilling & Cattle Feeding and General Electric. The Confederate Literary Association in Richmond, Va., plans for a reception with Mrs. Jefferson Davis. (Close: 40.94)Oct. 28, 1929: The Dow loses nearly 13 percent on what comes to be known as Black Monday, the start of the Great Depression. The next day, The New York Times describes an “unexpected torrent” of selling but assures readers that “the storm has now blown itself out.” The International Society for the Exploration of the Arctic Regions by Means of Aircraft plans a spring exploration to be led by Norwegian explorer Fridtjof Nansen. (Close: 260.64)March 15, 1933: The Dow has its biggest gain — more than 15 percent. The stock market had been closed after President Franklin D. Roosevelt temporarily shut down U.S. banks, long enough to pass an emergency act in which the Federal Reserve essentially agreed to insure banks’ deposits. (Close: 62.10)Nov. 14, 1972: First close above 1,000. In Hollywood, police arrest four men for allegedly trying to steal a 2,500-pound brass lion from an antiques store. The week before, President Richard Nixon had won re-election by a landslide, beating George McGovern in 49 states. (Close: 1,003.16)Jan. 8, 1987: First close above 2,000. President Ronald Reagan recovers after prostate surgery. Paul Simon, Whitney Houston and the Chicago Bears Shufflin’ Crew’s “Super Bowl Shuffle” get Grammy nominations. (Close: 2,002.25)Oct. 19, 1987: Biggest percent loss. The Dow plunges nearly 23 percent in the second panic that comes to be known as Black Monday. The next day, Donald Trump says he had already pulled out of the stock market in the previous weeks. “Fatal Attraction” and “The Princess Bride” are two of the top-ranked movies. (Close: 1,738.74)April 17, 1991: First close above 3,000. Henson Associates, owner of The Muppets, accuses Disney of using its characters without license. Soviet President Mikhail Gorbachev pleads for aid in a speech to Japan’s parliament. (Close: 3,004.46)April 6, 1998: First close above 9,000, after Citicorp announces its combination with insurer Travelers Group — a deal that ignites the megabank era now blamed in part for the financial crisis. Monica Lewinsky’s lawyer says special prosecutor Kenneth Starr should wrap up his investigation of President Bill Clinton and “get a life.” (Close: 9.033.22)March 29, 1999: First close above 10,000. The next day, The Wall Street Journal runs this front-page headline: “If This Is a Bubble, It Sure Is Hard to Pop.” Rwanda holds it first free elections since the 1994 genocide. The previous day, Venus and Serena Williams had faced off as finalists in the Lipton Championships. Venus, 18, beat Serena, 17. (Close: 10,006.78)Sept. 17, 2001: Trading resumes for the first time since the 9/11 attacks. The Dow falls more than 7 percent. Police and firefighters ring the opening bell at the New York Stock Exchange, after two minutes of silence. Major League Baseball resumes with Barry Bonds chasing Mark McGwire’s home run record. (Close: 8920.70)Oct. 9, 2007: The Dow hits a record high that lasts until Tuesday. A New Jersey hospital suspends workers for prying into the medical records of George Clooney, who was treated for a motorcycle accident. (Close: 14,164.53)Sept. 15, 2008: First trading day after the weekend that Lehman Brothers collapsed, Merrill Lynch sold itself to Bank of America, and the government bailed out AIG. The Dow falls more than 4 percent. A federal judge in Montana rejects a plan to allow more than 500 snowmobiles into Yellowstone and Grand Teton national parks. (Close: 10,917.51)Oct. 13, 2008: Biggest percent gain since the 1930s, up more than 11 percent, after the government outlines the bank bailout plan that comes to be known as TARP. The win is relative: It follows eight straight days of losses, and the Dow continues falling afterward. The day before, Republican presidential candidate John McCain had encountered Joe the Plumber. (Close: 9,387.61)March 9, 2009: The Dow falls to its lowest point of the Great Recession. Iceland seizes another struggling major bank. A first-printing copy of the first Harry Potter book sells for more than $19,000. Chuck Norris turns 69 the next day. (Close: 6,547.05)May 6, 2010: The “flash crash” technical glitch sends stocks swinging. The Dow falls nearly 1,000 points in minutes and closes 347.80 points lower. Picasso’s painting “Woman with the Large Hat, Bust” had sold the previous day for $9.3 million at Sotheby’s. (Close: 10,520.32)Aug. 8, 2011: First day of trading after the Standard & Poor’s ratings agency marks down its grade on U.S. debt. The Dow loses more than 5 percent. Selena Gomez and then-boyfriend Justin Bieber had been top news at the Teen Choice Awards the previous evening. (Close: 10,809.85)March 5, 2013: The Dow closes at its highest level, 14,253.77, helped by stimulus money from the Federal Reserve, hope that the housing market is improving and investors’ willingness to disregard a potential government shutdown in Washington. Roman Catholic cardinals ponder who to nominate for pope, a month after Benedict XVI announced his resignation. Hugo Chavez, the fiery president of Venezuela, dies after a two-year bout with cancer.May 7, 2013: The Dow closes above 15,000 for the first time, a day after billionaire Warren Buffett says investors shouldn’t own bonds. He credits the Fed’s efforts to keep interest rates low and the strengthening economy with lifting the stock market. Justin Timberlake tops music lists with “Mirrors” and “Suit & Tie.” (Close: 15,056.20)Barbara Sambriski of the AP contributed.
It was another milestone in the market’s epic ascent of 2013. Good economic reports, strong corporate earnings and fresh support from central banks have eased investors’ concerns about another economic slowdown. Many had been on the lookout for signs that a spring swoon would derail the rally, as happened in each of the past three years.
Instead, Wall Street has climbed almost 15 percent since Jan. 1.
“The thing that’s been driving stocks is rising confidence,” said James Paulsen, chief investment strategist at Wells Capital Management. “Economic growth, job creation and the housing market have been better than expected.”
News of stronger hiring over the past three months briefly propelled the Dow over 15,000 on Friday, but it ended the week below that mark.
Wall Street followed Japanese and European markets higher after they responded to good news about central bank stimulus and the German economy. In the U.S., the market got a lift from higher quarterly profits at satellite TV company DirecTV and watchmaker Fossil.
The Dow closed at 15,056.20, up 87.31 points, or 0.6 percent. The Standard & Poor’s 500 index added 8.46 points to 1,625.96, a gain of 0.5 percent. Both indexes reached all-time highs earlier this year, then kept climbing, largely driven by optimism that the U.S. economy will continue gaining strength.
“We don’t think people are giving enough credit to the strength of the economy,” said Ryan Detrick, a senior technical strategist at Schaeffer’s Investment Research. “We still like the market.”
The gains piled up with the growing realization among investors that the traditional threats to a rising market — higher interest rates, falling profits, a possible recession — are unlikely to appear anytime soon. What’s more, with interest rates near record lows, they see few other places to put their money.
In a round of interviews on Monday, investor Warren Buffett said the stock market looked “reasonably priced” even after its surge. But, Buffett added, people pay too much attention to markets reaching new highs. They ought to pay attention when markets hit new lows.
“That’s when stocks are getting cheaper,” Buffett said. “That’s when stocks are going on sale. But people do get more excited when they see new highs.”
Record-high profits have also encouraged investors who fretted that slumping sales would lead to shrinking earnings. More than 400 of the S&P 500 companies have turned in first-quarter results, and more than seven out of 10 have beaten Wall Street’s earnings expectations, according to S&P Capital IQ. Those analysts estimate that earnings increased 5 percent in the first quarter and will pick up their pace through the rest of the year.
Fossil, a maker of watches and handbags, was among the companies reporting earnings Tuesday. Its stock leapt $8.92, or 9 percent, to $107.88 after the company said higher sales lifted its earnings.
DirecTV, the country’s largest provider of satellite TV services, surged $3.99, or 7 percent, to $61.95 after its earnings beat analysts’ expectations. The company reported more subscribers in the U.S. and Latin America.
For the Dow, it was the 17th straight Tuesday of increases. The only day of the week with a longer series of consecutive gains is Wednesday, which logged a streak of 24, Detrick said.
In other trading, the Nasdaq composite rose 3.66 points to 3,396.63, up 0.1 percent.
Japanese stocks surged, pushing the Nikkei above 14,000 for the first time in nearly five years. The Nikkei has jumped 36 percent this year after the Bank of Japan announced a new aggressive monetary policy to get the country out of its two-decade stagnation.
In Europe, Germany’s main DAX index touched a record of 8,195, bouyed by surprisingly strong industrial orders.
Detrick said he was particularly encouraged by the resurgence in smaller stocks, which suggested a broad recovery beyond larger companies. The Russell 2000 index of small companies has gained 14 percent this year.
In the market for U.S government bonds, the yield on the 10-year U.S. Treasury note edged up to 1.78 percent from 1.76 percent in late Monday trading. Optimism over the U.S. economy has yanked the yield up over the past week, as traders shift money out of the safety of the Treasury market. The yield sank to its low for the year, 1.63 percent, last Thursday.
Bernard Condon of the AP contributed to this report.