Dow hits 10,000 a decade later
When the Dow Jones Industrial Average closed above the 10,000 mark Wednesday, it regained the benchmark it first hit more than 10 years ago, in early 1999.
But this time around, reaching the five-figure number produced more a sense of relief than the enthusiasm that it prompted a decade ago. Back then, of course, the stock market was just one indicator of a booming economy that included rapidly rising real estate prices, a job market in which employers struggled to find enough workers and a retail industry that chugged steadily along.
Wednesday’s topping of 10,000 comes amid an entirely different economic scenario. While it’s true that the Dow has rallied by more than 50 percent since its low point last March, other indicators aren’t as promising.
For instance, retail sales declined in September by the largest amount this year. Much of that decline was in auto sales, which cratered after the Cash for Clunkers program ended. When auto sales are taken out of the picture, retail sales rose by 0.5 percent.
In real estate there has been some increase in the sales of new and existing homes. But economists warn that a big downturn in commercial real estate may be coming.
Worse yet are the job numbers. The unemployment rate continues to hover just below 10 percent, and experts say the U.S. economy is continuing to lose about 250,000 jobs each month. While jobs always trail other indicators in a recovery, most people won’t believe there is a real recovery until the economy starts adding jobs, not shedding them.
Despite all this, there was good economic news that helped drive the Dow toward 10,000, including better-than-expected quarterly reports from Intel and JPMorgan Chase. And the retail sales figures were better than analysts had predicted.
It isn’t proof that the economy is rebounding, but the fact that the Dow reached the benchmark it hasn’t seen since last October is an indication that many investors believe the worst is over. And that is welcome news.