Dow closes at all-time high, beating 2007 record
NEW YORK (KABC) -- The Dow Jones industrial average closed at a record high Tuesday, beating the previous high mark it set in October 2007, before the financial crisis and Great Recession.
The Dow rose 125.95 points to 14,253.77, an increase of 0.89 percent. The index jumped from the opening bell, climbed as much as 158 points early and peaked at 14,286.
The Dow surpassed its previous record close of 14,164.53 from Oct. 9, 2007.
Tuesday's record represents a remarkable comeback for the stock market. The Dow has more than doubled since falling to a low of 6,547 in March 9, 2009, following the financial crisis and the onset of the Great Recession. Stocks have been helped by stimulus from the Federal Reserve and quarter after quarter of record corporate profits, even as the economic recovery has been slow and unemployment has remained high.
Housing has been showing signs of life, the European markets hit multi-year highs and the stalemate over the government's automatic spending cuts, the so-called sequester, hasn't had much effect on consumer confidence.
But what does it really mean to set a record? Is the economy back to full strength? Not quite.
"You don't see the champagne bottle and the confetti coming down from the ceiling and the balloons and all that because there is still a very, very big disconnect between what the market is telling us and what the economy is telling us," said Ken Polcari, of O'Neil Securities Inc.
The stock market is not the economy. Historically, new records signal the peak of the market.
Wealth manager Ryan Wong says be patient and don't sell stock at this time.
"We would suggest staying the course because if you were to sell now, you've got to buy something else. Sell high, you'll be buying high," Wong said.
Still, there is a lot to like about the new record Dow.
"A strong stock market builds confidence has companies hiring," said Matt Nesto of Yahoo! Finance. "That all bodes well for confidence, so it is sort of a self-fulfilling prophecy."
Although the Dow gets the most attention, Standard & Poor's 500 index is a much broader indicator of how the stock market is doing. On Tuesday, it rose 15 points, or 1 percent, to 1,539.79. The S&P is also within striking distance of its record close of 1,565.
The Nasdaq gained 42.10 points, or 1.3 percent, to 3,224.13.
Three stocks rose for every one that fell on the New York Stock Exchange. Volume was light, 3.3 billion shares.
The Associated Press contributed to this report.
economy, wall street, business, ric romero
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