The bull market’s most dramatic sign of strength yet is showing up in a big-round number: 16,000.
The Dow Jones industrial average jumped back above 16,000 Thursday and closed there for the first time in the much-watched average’s history.
The market is being lifted as investors applaud the fact unemployment benefits fell to levels not seen in two months. It’s just the latest major market milestone to fall in the ongoing bull market that has been powered by low valuations in the wake of the 2008 financial crisis in addition to a stimulative Federal Reserve and improving housing market.
Reaching 16,010 at the closing bell, the Dow clocked a 0.7 percent gain on the day, up 109 points.
The S&P 500 is just shy of its own even-number threshold that it has yet to surpass at the close, 1,800. The index gained 0.8 percent for the day to end up at 1,796.
A third major index, the Nasdaq composite, gained the most on the day, rocketing 1.2 percent to 3,969.
“People may discount milestones, but they are physiologically significant,” said Todd Salamone of Schaeffer’s Investment Research.
The Dow took out the 16,000 level just 198 days after toppling the 15,000 barrier on May 7, said S&P Dow Jones Indices. Watching the Dow power past 16,000 is just another brutal reminder to investors who’ve been calling for a correction of how wrong they’ve been and how they’ve missed out on a historic bull market. The Dow’s rise Thursday snaps what had been a three-day losing streak.
Seeing the market charge higher may start to get investors, who have avoided stocks since the 2008 financial crisis, to perhaps wade back in, said Ken Winans of Winans Investments. “Sixteen thousand is the catnip to the retail investor. When people talk about the Dow, they don’t talk about Dow 15,999. They care about Dow 16,000,” he said. “Those that missed this rally will call their brokerage and jump in.”
The market’s rise has been staggering too, given the number of problems the economy and investors had to look past.
“The whole market has climbed a wall of worry, including a fiscal cliff, interest rate worries, government shut downs,” Winans said. “There have been many reasons for this market to blow up, and it hasn’t,” he said.
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