Dow nearly tops 2007 peak before stocks sag
The blue chips come within 16 points of their closing high before profit-taking sets in. The DJIA is up about 116% since its March 2009 bottom. Their recovery has been led by American Express, Caterpillar and Home Depot.
The Dow Jones Industrial Average ($INDU) came within about 15 points of topping its 2007 closing high Thursday afternoon, but late selling stalled what had looked like a decent rally.
The Dow ended the day down 21 points to 14,055 -- and 110 points below its all-time closing high of 14,164.53, set on Oct. 9, 207. The other major averages suffered small declines as well.
The 95-point downside swing for the blue chips will undoubtedly suggest to some that the stock market has hit a peak. But it will take a few days at least for the picture to clarify itself.
In addition, to the Dow's finish, the Standard & Poor's 500 Index ($INX) closed down 1 point to 1,515. The Nasdaq Composite Index ($COMPX) gave up a sizable gain, dropping 2 points to 3,160.
Despite the pullback, the major averages did manage to finish higher in February. The Dow's 1.4% gain was its third monthly gain in a row. The S&P 500 and the Nasdaq were higher for a fourth straight month.
The Dow was up 1.4% for the month, with the S&P 500 up 1.1% and the Nasdaq up 0.6%.
The Dow reached as high as 14,149.15 just after 2 p.m. ET. That was just below the blue chips' all-time closing high of 14,164.53, reached on Oct. 9, 2007. The index hit its intra-day peak of 14,198.10 two days later -- but ended the day down 64 points.
The S&P 500 finished 51 points below its peak close of 1,565.15, also set on Oct. 9, 2007. The Nasdaq is still 37% below its March 2000 peak of 5,049, reached during the dot.com bubble.
The market was higher much of the day, with the Dow up as many as 74 points before the selling began. The gains were prompted in part by a decent jobless claims report and a revision to fourth-quarter gross domestic product figures. The government's latest report shows the economy growing -- barely -- in the last three months of 2012. The original estimate said the economy was shrinking -- barely.
In addition, Mario Draghi, president of the European Central Bank, said he had no plans to raise interest rates any time soon, echoing what Federal Reserve Chairman Ben Bernanke said on Tuesday and Wednesday.
The Dow has risen about 116% since its bottom on March 9, 2009. That bottom came after a decline of nearly 54% from the October 2007 peak. At that time, stocks plunged as the U.S. housing bubble burst and the global financial system came under extreme pressure.
The collapse helped produced the worst recession since World War II and saw the near collapse of the U.S. banking system, the housing markets, and the U.S. auto industry.
The Dow's recovery since 2009 has been led by American Express (AXP), up 487%; Caterpillar (CAT), up 287%; and Home Depot (HD), 278%. The laggards have been Hewlett-Packard (HPQ), down 21%, and Exxon Mobil (XOM), up 38.7%.
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I've made back what I'd lost from ~ 2008 plus another 10% or so and I don't want to be greedy/start over again if it drops. This makes about 400k total I've pulled out since Obama was elected. I didn't believe he was good for small business and not seen anything to change my mind. Actually, he may be worse than I thought.
Well, perhaps all of the market euphoria is justified, I just want to protect the principal at this point. I'm planning to hold tight for several months to see if it is real, or if the wheels come off the bus 3rd or 4th quarter. Then, I'm even more concerned about 2014 when people see how "free" Obamacare really was and have even less money to purchase goods ... seeing what the recent little coupe percent SS holiday expiration did makes me think next year will be even worse.
I figure I can always buy back in later/lower. I'll let you young folks with guts and glory ride this one higher and I really hope I'm wrong for your sake. I can weather the loss to inflation for a few years, but not several hundred grand so my market exposure is now pretty low. Will always have money in the market, it is now only about 30% ... the least I've had in for 30+ years. Good luck to all of you riders of the storm.
If the Markets doing so well, then why is more than 75% of the US working population hurting so bad?????
randall grussing.... what constitutes a gain ? Everything since 2007 has been inflation A gain of about 6000 points is good ? Seemingly all is fine?...need no interest rate adjustments with the Fed. involvement ?
The Dow will go lower.....an all out depression is need to clean up the mess !
Wow! Things are f*cking great! Lets all throw our money in the stock market!
Oh sh*t! I forgot! I don't have any money!
It's going to bust, and then will everyone say, "I had no idea, I lost so much money." And the big boys will ask the government for more loans, because, "If we go down, we'll have to fire all our employees."
This govenrment will never say no to handing out other people's money. Another TARP will happen when it all goes south. It's like the crackhead daughter of a well to do family. Just keep giving her money, pay no attention to fixing her, then she'll end up dead but not before she pawns everything you own. I love using police metaphors.
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Bill Stiritz has experienced an estimated $145 million in paper losses on his investment in the company.
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