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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Dow hits a new one-year high

Should you start singing, "Happy Days Are Here Again"?

Not yet, but it is encouraging news for investors that earlier today the Dow hit a new one-year high.

In midday trading, the Dow is trading at 10,728, up nearly four-tenths of 1 percent on the day. Earlier today, the Dow briefly touched 10,734, topping its previous 52-week high of 10,729, set back in January, before it retreated slightly.

The broader S&P 500 and the tech-heavy Nasdaq also are trading higher on the day. The Nasdaq has hit an 18-month high today.

This is an important milepost for the Dow, which is made up of 30 blue-chip stocks, just as it was when the Dow broke back up through the 10,000 mark last fall.

As even casual investors know, the markets thrive on confidence and can become self-perpetuating machines. Small bits of optimism can snowball into big rallies, and the opposite is true, as well.

Tracking the Dow over the past year, we see a strong climb up off the March 9, 2009, bottom, followed by a summer swoon, followed by a reset rally that continued until about November when, despite some peaks and valleys, the Dow has moved mostly sideways. In early February, following a short trough, the Dow began a steady climb.

Why has the Dow surged? Today, it was likely pushed up through its previous one-year high by yesterday's news out of the Fed that it would keep interest rates low for at least six more months. Loose money is good for the markets, though not for long-term debt and inflation. But the markets care mostly about today.

Recently, the Dow has been climbing with this modest, soft recovery. Plenty of bears are worried about a coming downturn, or "correction," unless something can be done to significantly eat into the nation's very high unemployment rate, which stands at 9.7 percent and is expected to hover near 10 percent through at least the rest of the year.

For ordinary investors and soon-to-be retirees, we know that when we look at our 401(k)s and our stock portfolios, we're still only about 75 percent back to where we were when the Dow peaked at more than 14,000 in October 2007. It's foolish to expect another big rally like we saw off the March 9, 2009, bottom, but investors would be pleased if the Dow just kept up its steady, modest progress.

Follow me on Twitter at @theticker

By Frank Ahrens  |  March 17, 2010; 12:34 PM ET
Categories:  The Ticker , Wall Street  | Tags: Dow Jones, nasdaq, s&p 500  
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Next: Feb. inflation flat, new jobless claims in line with expectations

Comments

"As even casual investors know, the markets thrive on confidence and can become self-perpetuating machines."

This can be truly said for all economies; they are driven by perceptions and can become self-fulfilling prophecies. This works to the advantage of those who wish to control them (banks/brokerage firms c. 2008) and Governments who wish to use them to control the populace.

Questioning WHO is saying something, be it good or bad, will always indicate what they want to control In other words, follow the money.

Posted by: jimmernick | March 17, 2010 3:17 PM | Report abuse

A bit more than just a "one-year high". It's the highest since the freefall of the first week of October 2008.

Posted by: FrankIBC | March 17, 2010 3:23 PM | Report abuse

For me, it's simple: As Ford goes, so goes America !

Posted by: jralger | March 17, 2010 3:26 PM | Report abuse

WELL DONE OBAMA!
Undoing the damage wrought by the NeoCon Bushies.

Posted by: chucky-el | March 17, 2010 3:33 PM | Report abuse

Sucker Rally fueled by hedge funds trading with the house's, aka, the Fed's, money.

Posted by: sasquatchbigfoot | March 17, 2010 4:02 PM | Report abuse

You mean all those claims from the right that our economy is tanking under Obama is BS??? You mean their claim that he's running our economy into the ground is a lie???

Oh...

Of course, I knew that anyway. What WOULD be news is if the GOP actually told the truth about something.

Posted by: abigsam | March 17, 2010 4:20 PM | Report abuse

Sucker Rally fueled by hedge funds trading with the house's, aka, the Fed's, money.

Posted by: sasquatchbigfoot | March 17, 2010 4:02 PM | Report abuse

===

hmnf. Funny...that's the SAME thing I've been hearing for over a year now.

So, since you obviously know a lot about this, does a "suckers rally" usually last for more than a year?

Posted by: mikem1 | March 17, 2010 4:50 PM | Report abuse

The rally off the March 09 low has been impressive.....but not a coincidence.

That's the month when Congress held a gun to FASB's head to suspend the mark-to-market accounting standard ( FAS 157 ). That allowed financial institutions to hide real estate losses off balance sheet. Sound familiar ??? That's exactly what Uncle Sam is doing with trillions in Fannie/Freddie losses, too. And the Fed balance sheet has absorbed $2 trillion of crap assets, too.

Banks are carrying hundreds of billions in unrecognized balance sheet losses. International banks are doing likewise. All waiting for real estate reflation to make it all money good. Meanwhile, the pump team works the unwary investor back into the market....a few of them at least.

Sorry. This rally was manufactured out of leagalized accounting fraud, zero % Fed cash and loads of deceit. Don't be surprised when it all falls apart, circa 1930.

Posted by: bandcyuk | March 17, 2010 5:07 PM | Report abuse

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