Oct 15 2009
Dow Remains Above 10,000
The Dow Jones Industrial Average closed above 10,000 Thursday for the second straight day. Yesterday, the benchmark U.S. stock index broke 10,000 for the first time in 54 weeks. Early Friday trading in Asia is higher thanks to the strong U.S. market.
Since America’s recession became widespread, stocks have suffered. However, the days of only billionaires losing “paper wealth” because a share price lost a few dollars are over. The majority of Americans is invested in the stock market. There are a relatively few day-traders and self-service people who use Internet sites for investing.
The bulk of American stock buying is through mutual funds and pension funds. Historically, the stock market has gained value faster than other investments. Therefore, people seeking higher rates of return on their money favor aggressive stock trading. Until, of course, the market sags.
The 30 companies that comprise the Dow are 3M, Alcoa, American Express, AT&T, Bank of America, Boeing, Caterpillar, Chevron, Cisco, Coca-Cola, Disney, Du Pont, General Electric, Hewlett-Packard, Home Depot, Intel, IBM, Johnson and Johnson, JP Morgan Chase, Kraft, McDonald’s, Merck, Microsoft, Pfizer, Proctor and Gamble, Travelers, United Technologies Corporation, Verizon and Wal-Mart. They’re among the biggest American businesses; therefore, they’re supposed to be good bellwethers for the U.S. economy.
The Standard and Poor’s index lists 500 publicly-traded companies. Obviously, the S&P is a more broad-based measure of American stock. The NASDAQ focuses on technology businesses.
The major indexes are still 30 to 50 percent below record highs. Whether, now that the psychological barrier of Dow 10,000 has been crossed, stocks continue to rebound is an open question.
