Dow Hits 2009 Intraday High
The stock market ended the day mixed, with the Dow Jones industrial average and the Standard & Poor's 500-stock index closing up while the Nasdaq finished down, but the Dow hit a new 2009 intraday high before pulling back, on hope that third-quarter earnings, which start rolling out in earnest on Tuesday, will be good.
The Dow crested at 9,931 in the first 90 minutes of trading before going negative in the afternoon and then finishing up 0.2 percent at 9885.80.
What does this mean?
Well, it means that the Dow inched closer to the psychologically important 10,000 barrier. The blue-chip index peaked at more than 14,000 in October 2007, then plunged down through 10,000 one year later. Since then, the Dow has not hit 10,000. When it does, that will be a benchmark on the road to recovery, instilling confidence in traders, which could stoke further growth.
But you shouldn't necessarily think that the Dow will pick right up tomorrow morning on an unimpeded march toward 10,000. Because of the Columbus Day holiday, trading volume on the Dow today was close to its lowest level for the year. (Only January 2 saw fewer shares trading hands.) That means today's gains come from a smaller-than-usual volume sample, so include that in your thinking.
For the six-month period following its March 9 bottom, the Dow rose about 47 percent.
Since then, the Dow has gained a little more than 3 percent. To look at it another way, over the past six months, going back to April 11, the Dow is up about 23 percent, or half of the growth from April to September.
No one expected the markets to continue their big recovery rally. But it's clear the rally is leveling out as it can no longer ignore weaknesses in the real economy underlying it. A raft of solid third-quarter results will stoke the markets, and maybe push the Dow through the 10,000 roof, but with unemployment at 9.8 percent and probably rising, it will probably start to feel like driving with the parking brake on: You still go forward, but you feel the drag.
-- Frank Ahrens
The comments to this entry are closed.