Dow briefly
tops 10,000

Traders cheer the milestone before
sending the index down for the day

NEW YORK -- The Dow Jones industrial average briefly broke through 10,000 today, a feat made possible by nearly a decade of steady economic expansion and a growing enthusiasm for technology, especially the Internet.

The Dow industrials cleared the milestone at 9:50 a.m. EST (4:50 a.m. Hawaii time), and climbed as high as 10,001.78, a gain of 43.01, before retreating.

By the close of trading, the Dow was down 28.30 at 9,930.47. The index had fluctuated in and out of positive territory throughout the day but never climbed above 10,000 after the initial move 20 minutes in to the day's trading session.

Broader stock indicators ended the day mixed.

The Standard & Poor's 500 slipped 0.90 to 1,306.36 but the technology-heavy Nasdaq composite index rose 7.83 to 2,439.27.

Declining issues outnumbered advancers by a 9-to-7 margin on the New York Stock Exchange, with 1,668 down, 1,299 up and 574 unchanged. NYSE volume totaled 744.86 million shares vs. 730 million yesterday.

The NYSE composite index fell 1.14 to 614.08; the American Stock Exchange composite index lost 4.60 to 716.31; and the Russell 2000 index of smaller companies slipped 1.67 to 399.17.

Traders cheered and waved their arms in celebration on the floor of the New York Stock Exchange as the milestone was passed. Some held up both hands with their fingers spread to signify 10 as in 10,000. After the roar, the revelry lasted only about 30 seconds before traders and clerks returned to work.

The average of 30 blue-chip stocks took almost a year to gain the final 1,000 points in its charge, after passing 9,000 on April 6, 1998.

The 1990s bull market was all but written off last summer and early autumn. The Dow and broader indicators plummeted after Russia's economic crisis sent shocks through world markets already wary because of worries that Asia's turmoil would deepen and that financial unrest would engulf Latin America. The Dow fell below 7,500 as recently as Oct. 8, but stocks rebounded on a series of three interest rate cuts by the Federal Reserve.

The Dow got a lift today from an upbeat earnings forecast from Union Carbide, one of the Dow's components. Wall Street's best-known indicator also has been pumped up by its own momentum, including a spurt of more than 700 points in the past two weeks. By reaching five digits, the Dow is now up nearly 9 percent this year on top of an unprecedented four straight years of double-digit growth.

The march toward 10,000 actually began in the early in 1990s when the U.S. economy began a remarkable upward line of growth combined with low inflation and interest rates that kept consumers spending and corporate profits rising. The rise of personal computers and technology improved Corporate America's productivity even as manufacturing jobs steadily declined.

The market got an additional boost in the past year through the explosion of enthusiasm for moneymaking on the Internet as hundreds of companies to put a ".com" after their names, expecting a big payoff by selling everything from Furby dolls to stocks on the World Wide Web.

And it was turbo-charged by a recent perception that the troubled economies of Asia and Brazil may be bottoming out.

"This is a phenomenal market," said Ralph Acampora, director of technical research, Prudential Securities. "It's not the level of 10,000; it's the quality of stocks . . . GE and Merck and American Express. If we're investing in blue-chip America, it can't be bad. You should be singing 'God Bless America.' "

Acampora forecasts the Dow will reach 11,500 by the end of this year and said it could double within eight years.

But several investors said that while they were cheered by the Dow's performance, they wondered how far above 10,000 the bull market could climb.

"It makes me a little more cautious because it's a hype number, a magic number, that everyone's expecting," said Andrew Jablonski, 42, a graphic designer from Yonkers, N.Y., as he emerged from a Fidelity Investments office on New York's Park Avenue. Jablonski said he is putting more money into more conservative investments now.

"I think a lot of people will look closer, and this honeymoon mood will have to be checked with reality," he said.

Treasury bond prices, meanwhile, were higher at midday. The price of the Treasury's main 30-year bond was up 3/4 point, or $7.50 per $1,000 in face value, around midday, while its yield fell to 5.47 percent from 5.52 percent late yesterday. Prices and yields move in opposite directions.

For some stock market pessimists, two of the main causes of the rally could be its undoing.

If the strong economy gets too strong, there will be a shortage of labor and materials, the inflation rate will rise, interest rates will go up and the market will fall.

Likewise the current craze for the Internet could go bust if the market starts demanding that many of these red-hot, but so-far profitless companies start earning money.