Closing Market Report
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Dow record is just another number
By Ellen Simon
Associated Press
NEW YORK » The Dow Jones industrial average may have pierced its 2000 record, but Wall Street couldn't be further from its turn-of-the century stock hysteria.
"If we do break this number, then what?" said Jay Suskind, head trader at Ryan Beck & Co. "It's not like we're off to the races. It's just a number."
In early trading yesterday, the Dow rose to 11,724.86, briefly breaking though its record close of 11,722.98 before retreating. The Dow closed 29.21 points higher, or 0.25 percent, at 11,718.45. It has yet to reach its all-time trading high of 11,750.28, also set Jan. 14, 2000.
Any resemblance to yesterday's close to the go-go years is purely a coincidence, Suskind said. "Everybody is trying to hark back to the days, and it's just not there."
Just being near its highs may have propelled the Dow above them, said Jon Brorson, head of growth equities at Neuberger Berman in Chicago.
"Professional traders love targets. When you ever have a target out there, they will be drawn to it like a moth to a bug zapper. They will run the market up and see if they can hit that target."
What the Dow's flirtation with its record could signal is that investors believe better times are ahead. If they believed many economists' predictions that the downturn in the housing market will push the economy into recession, they wouldn't be buying stocks now at all.
But it would be an even bigger vote of confidence if the Standard & Poor's 500 were anywhere near its own highs. Instead, it is about 12.5 percent beneath those highs.
The broader Standard & Poor's 500 and Nasdaq composite indexes are far off their all-time highs, although their records were reached around the same time.
The S&P, which gained 2.56, or 0.19 percent, to close at 1,339.15, is still about 188 points below its closing high of 1,527.46, but is at a 5 1/2-year high. The Nasdaq, which rose 6.63, or 0.29 percent, to 2,270.02, is not expected to approach its high close of 5,048.62 any time soon.
The last time the Dow stood at these levels, Wall Street was driven by wide-eyed investors eager for a slice of the wealth being generated by the dot-com and housing booms. Traders grabbed any stocks that looked remotely promising, catapulting the major indexes sharply higher.
But after early 2000, the market began to crumble, slowly at first as doubts about the high-tech boom set in. Signs of recession accelerated the decline, and then the Sept. 11, 2001, terror attacks and their aftermath, including earnings declines and losses in many industries, sent stocks plunging.