Fueled by Optimism and Demand, Dow Cracks 9000 for First TimeBy Robert O'Harrow Jr.
The Washington Post
The longest-running bull market in history cleared another hurdle today, as blue-chip stocks closed trading above 9,000 for the first time after Citicorp and Travelers Group Inc. announced they would combine to create the world's largest financial services company.
The Dow Jones industrial average ended the day at 9033.23, piercing its second 1,000-point mark in eight months. The Dow is up more than 14 percent so far this year, a much faster rise than many Wall Street strategists and investors had predicted. The Standard & Poor's Corp. 500-stock index is up more than 15 percent and the Nasdaq composite index is up more than 16 percent.
That ascent has been fueled by an almost insatiable demand for technology and financial services stocks since fears about Asia's economic troubles began to subside and the market started soaring in February, analysts said. A heavy dose of merger deals also has propelled stocks higher. "It's astonishing," said Nat Paull, senior portfolio manager for New Amsterdam Partners in New York who oversees $580 million in stock investments. The boom also has quickly expanded the fortunes of many small investors, such as Dave Miller, who ignored gloomy forecasts last year and kept pouring money into mutual funds.
Although there is growing concern about the slowing pace of corporate profits, an increasing number of Wall Street analysts now say they would not be surprised if the Dow hits 10,000 this year.
That would require the well-known average of 30 blue-chip stocks to rise another 11 percent or so. Such optimism is in sharp contrast to just four months ago, when Wall Street was anxious about the impact that troubles in South Korea, Indonesia and Japan would have on U.S. companies.