Dow Jones Hits 10,000 MarkBy Ianthe Jeanne Dugan and Robert O’Harrow Jr.
THE WASHINGTON POST
The Dow Jones industrial average closed above 10,000 for the first time Monday, creating a new benchmark for the longest-running bull market in history and underscoring the optimism of new investors dazzled by the high-tech boom and the nation’s robust economy.
Just one year after first hitting 9000, the widely watched barometer of 30 blue-chip stocks plowed through the five-digit mark in mid-afternoon and hung on until New York Mayor Rudolph Giuliani rang the closing bell at the New York Stock Exchange.
The Dow, which had captivated market watchers by bobbing around 10,000 for two weeks, rose more than 184 points, or 1.9 percent, to 10,006.78. Investors -- including the thousands of mutual funds that have lured many newcomers to the stock market in the past decade -- bid up share prices on a burst of enthusiasm over corporate mergers and earnings.
But crossing the threshold also spurred on a debate raging among market professionals. Many deride the Dow average as an imperfect proxy for the market, though they acknowledge its hold on the popular imagination. Yet analysts also disagreed sharply over whether Monday’s milestone is proof that the market is headed even higher -- or whether it masks a broad-based decline that has affected all but the biggest stocks.
With more Americans than ever investing their life savings on Wall Street, the answer matters a lot. In 1984, when the current bull market was two years old, about 12 percent of American households were invested in mutual funds, compared with 44 percent today, according to the Investment Company Institute, a trade group.
Many Americans indirectly hold stock through pensions and other retirement accounts, amd small investors are increasingly trading stock themselves using the Internet.
“Generally, these numbers are just numbers. There’s nothing more magic about 10,000 than 9997.6,” said David Wyss, chief economist at Standard & Poor’s DRI forecasting unit. “There is a psychological element, though. People sit up and take notice.”
The Standard & Poor’s 500-stock index, a broader measure of the market than the Dow average, Monday jumped 27.37 points, or 2.1 percent, to 1310.17 and the technology-heavy Nasdaq composite index rose 73.67, or 3 percent, to 2492.84.
After the market closed, Coca-Cola, one of the Dow stocks, said worldwide sales volume had fallen in the first quarter, news that sent its stock tumbling in after-hours trading -- and would have knocked the Dow average below 10,000 if the news had been released earlier.