Dow Climbs Above 9000 on Data, Earnings
Buoyed by the latest signs of an economic recovery and a flood of positive earnings reports, the Dow eclipsed the pivotal 9000 level Thursday morning for the first time since early January.
"You are getting little building blocks of evidence that there is a recovery on the way," said Richard Sparks, equity analyst at Schaeffer's Investment Research. "That's happening with the earnings reports and some of the economic reports."
Wall Street cheered new economic reports Thursday showing existing-home sales climbed to the highest level since October and initial jobless claims rose by less than expected last week. At the same time, another round of bellwether companies like AT&T (T) and 3M (MMM) reported better-than-expected quarterly results.
The benchmark index hadn't climbed above the 9000 level since Jan. 6 and the recession and financial crisis eventually sent the Dow as low as 6469 in March. But signs the economy is stabilizing and the easing of the credit crisis sent stocks soaring off multi-year lows, with the latest surge coming this month amid a solid start to earnings season.
Now this may be just a temporary improvement, as one investor commented (emphasis mine):
"It's a freight train. You can't get in front of it," said Frank Davis, director of sales and trading at LEK Securities. "It's sort of like turning the Queen Mary. I thought it would've turned down already but it hasn't. There's no fundamental reason for it to stay up."
But what if he's wrong? What if, as has been true so often in the past, the stock market is predicting the future? What if, once again the adage is true that "the stock market climbs a 'wall of worry'"? What if today's stock market activity truly is predicting a recovry? Imagine, then, the 2012 presidential campaign, amid a solid economy, plunging unemployment and rising home sales. In that scenario, would not Boehner's video, with it's moaning and groaning about current economic conditions, would make a terrific campaign ad for the Democrats?