DebateGate
General Category => 3DHS => Topic started by: Amianthus on October 03, 2006, 05:20:37 PM
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Oct 3, 4:08 PM (ET)
By ELLEN SIMON
NEW YORK (AP) - The Dow Jones industrial average surged past its all-time trading high of 11,750.28 Tuesday, taking yet another step in its recovery from seven years of market turmoil. The index of 30 blue chip stocks fell back in later trading but still managed to achieve a record high close.
The Dow moved into uncharted territory in early afternoon and climbed as high as 11,758.95 before falling back. According to preliminary calculations, it closed at 11,727.34, eclipsing the the previous close of 11,722.98. Both records were set on Jan. 14, 2000.
While investors welcomed the Dow's latest achievement, it comes at a time the stock market is more conservative, even more muted, than the Wall Street of early 2000. Then, investors were still piling exuberantly into high-tech stocks. In 2006, the market's gains come only after investors' careful parsing of economic data and corporate earnings reports.
Tuesday's advance came on the second straight day that oil prices fell sharply, helping to calm fears about inflation and possible interest rate increases. But the market as a whole has been choppy, with traditionally defensive sectors such as pharmaceuticals and utilities leading the market higher since its May and June decline, said Doug Johnston, head of U.S. trading at Adams Harkness in Boston.
"I think we break out to the all-time high, then we could get a blow-off correction off of that," Johnston said.
The Dow, whose well-known large-cap stocks include aluminum producer Alcoa Inc. (AA), discount retailer Wal-Mart Stores Inc. (WMT) and the Walt Disney Co., has recovered ahead of the broader Standard & Poor's 500 and the Nasdaq composite index, which also peaked in early 2000. Those indexes were inflated - overinflated in the case of the Nasdaq - by the dot-com bubble.
The S&P 500's high close was 1,527.46, and the index remains more than 12 percent away from that milestone. The Nasdaq is even farther off its highs and no one expects it to eclipse its record of 5,048.62 any time soon.
To reach new highs, the Dow had to recover not only from the high-tech collapse, but also recession and the effects of the Sept. 11, 2001, terror attacks. The stock market was further shaken by corporate scandals at companies including Enron Corp. and WorldCom Inc., and the Dow sank to a five-year closing low of 7,286.27 on Oct. 9, 2002, nearly 38 percent off its record high close.
The market's recovery was helped by more than four years of solid corporate profit growth, and more recently, the Federal Reserve's decision to halt its more than two-year string of interest rate hikes.
http://apnews.myway.com//article/20061003/D8KHC6M00.html (http://apnews.myway.com//article/20061003/D8KHC6M00.html)
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The Dow to soar to an all time high at this time does not make economic sense. The housing market is in recession, American auto makers are loosing billions of dollars every quater and are downsizing and the trade deficit continues to spiral out of control and the U.S. spending two-billion dollars a month on Iraq and Afghanistan.
There is only one explination for the dow. The mine is being salted to create some favorable economic news for the Bush' coalition. The money being poored into the Dow is coming from the oil companies. The oil companies made several trillion dollars over the past six months. Now the money squeezed out of Americans by price fixing gas, is being reinvested through a maze of money laundering store fronts.
A conspiracy between the Bush Administration and oil companies to mislead the public, by salting the Dow, makes sense. Its not the first time the Bush team has created news and circumstance in an effort to fool the general public.
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There is only one explination for the dow.
And in the real world, we can see that it's been steadily rising for years.
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Yes it has, corporations are getting richer and America is going broke. The deficit is the result of corporate plundering. Wall Street is the fox in the hen house.
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Yes it has, corporations are getting richer and America is going broke.
Most investments (in terms of dollars) are linked to the middle class.
The deficit is the result of corporate plundering. Wall Street is the fox in the hen house.
No, it's a result of Congress spending more than they take in.
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"The money being poored into the Dow is coming from the oil companies."
Hooray , out of the oil companys and into my 401k.
Bless their hearts , they know there are better things than money.
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If you are still invested in oil companies, you are not going to make much money in that 401-K.
Most of the money in the market has already been made for this period. Watch and see the Euro go way up against the dollar.
One Latin America fund, up 52% in the last year. Another Emerging Markets fund, up 49%.
The US cannot continue to piss away billions per week in Iraq and Afghanistan without serious harm to the economy.
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That damn Bush ;)
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If you are still invested in oil companies, you are not going to make much money in that 401-K.
Most of the money in the market has already been made for this period. Watch and see the Euro go way up against the dollar.
One Latin America fund, up 52% in the last year. Another Emerging Markets fund, up 49%.
The US cannot continue to piss away billions per week in Iraq and Afghanistan without serious harm to the economy.
My 401 is mostly in indexed funds includeing 15% in an international fund , no body can do well with out helping me out.
BTW it is not actually a 401k , as a civil servant I am getting a slightly better deal.
http://tsp.gov/
The TSP is something like what President Bush proposed as an addition to Social Security , something like a 401K.
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"The Dow to soar to an all time high at this time does not make economic sense. "
It is an auction , how does the price arrived at in a well attended auction fail to make sense?
It is like someone stnading in waist deep water but certain that the tide should not be in.
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Oh oh ohhhhhh!
I am experienceing Irrational Exeuberance!
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via Billmon:
"So if you invested $1,000 in the 30 companies in the Dow six years and almost nine months ago, you'd have $1000.34 today!
But, alas, if you invested that same amount in the S&P 500 Index (which in the winter of 2000 was bubbliciously full of tech stocks) you'd have only $910.56, and if you "invested" it in the companies in the Nasdaq Composite (the souffle of '90s equity indices) you'd have just $552.04.
Now, doesn't that make you feel better about the economy?"
http://billmon.org
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Of course, my point was simply to demonstrate reality, not try to score political hit points with grossly distorted claims
via Billmon:"So if you invested $1,000 in the 30 companies in the Dow six years and almost nine months ago, you'd have $1000.34 today! But, alas, if you invested that same amount in the S&P 500 Index (which in the winter of 2000 was bubbliciously full of tech stocks) you'd have only $910.56, and if you "invested" it in the companies in the Nasdaq Composite (the souffle of '90s equity indices) you'd have just $552.04.
Now, doesn't that make you feel better about the economy?"
http://billmon.org
Spoken with the true ignorance only the left can demonstrate regarding the Stock market. Now, try applying your $1000 invested 20years ago. Care to show us how "terrible" that investment was? It's easy to pick the height of the Stock Market, just before the .com collapse. Most investers stated the market became too inflated, too fast, during the .com craze, and low & behold they were right. The idea is to invest wisely OVER A LONG PERIOD OF TIME. Not some hollow attempt in picking the highest point ever, then claim how terrible it is, now that it's managed to return to that height more steadily.
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Was the bubble burst of 2000 mostly the result of an overly optomistic run up in tech stocks?
NASDAQ is made up of younger and smaller companys the S+P 500 is strictly blue chip.
So the 500 rose less and fell less in the bubble economy.
I wonder what would have happened in economic news if Half of the Financhial District of New York had not been burnt down in 2001.
I speculate that the economy would have recovered faster without that , but how cold I prove it?
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Now, try applying your $1000 invested 20years ago.
If you stayed indexed, it would be worth $6,744.74.
However, that is not accurate, because it doesn't include reinvested dividends, stock splits, etc.
I have a friend that invested $10,000 in the stock market 20 years ago. He has a monthly income of $6,000 now, and is retired at 50.
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Now, try applying your $1000 invested 20years ago.
If you stayed indexed, it would be worth $6,744.74.
However, that is not accurate, because it doesn't include reinvested dividends, stock splits, etc.
I have a friend that invested $10,000 in the stock market 20 years ago. He has a monthly income of $6,000 now, and is retired at 50.
So Lanya, what's your response to this bit of unsavory news?
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You have no thoughts about this, Lanya?
:o
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Interesting. I see Lanya online. She's posted on this thread before. When a thread is posted on, it jumps up to the top. We have a specific question posed for her. And................? Boy, I didn't realize this forum format was that difficult
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Sirs, I think that's wonderful.
Just think what it must look like to a young person starting out....wow, in 6 years, I could have made 34 cents!
The original post is what I'm referring to here.
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Just think what it must look like to a young person starting out....wow, in 6 years, I could have made 34 cents!
Only if they invest stupidly. I made between 12-16% each of those 6 years in the stock market.
And besides, the original post is wrong anyway. The Dow Jones yield for 2000 was 1.4% (the lowest ever for that index). So, in that one year alone an investment of $1000 would have earned $14.
You have to look at the yield, not a straight multiplication of the closing prices. There are dividends, stock splits, etc, all combining to make money.
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Sirs, I think that's wonderful.
Well that's progress.
Just think what it must look like to a young person starting out....wow, in 6 years, I could have made 34 cents!
And just think, if they had invested more wisely, those #'s would obviously be much greater. And since this "young person" is obviously going to be smart and leave their money in the market for 20+ years, imagine the smile he and his family will have at the end of that time :)
The original post is what I'm referring to here.
Oh I realize it was just a partisan jab at Bush, trying to demean the excellent economy news that's been spreading. Too bad it's such a blatant distortion effort. But I do thank you for finally responding. It was very much appreciated
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The smart way to invest is not to try to time the market at all.
Oh sure you can see how a well timed investment might make outlandish sums of money , but you can also see how a poorly timed investment will loose a lot.
If that guy had understood Dollar cost adverageing he would have invested $200 six years ago and it would have slid rapidly to the value of $150 or so , but then he would have bought $200 the following month and the next and the next and so on.
If he kept that up till now he would have made a good investment by buying the advradge price of stock inbetween that time and this , since there was a big dip early in this program he got a bargan buy at that time and whenever the stock market was high he naturally bought fewer stocks because he bought the same dollar value reguardless of the swing.
Dollar cost adveradgeing is a good simple way to make buying low automatic because when stocks are low you tend to buy more and when they are high you buy no more.
Selling can be done the same way , retireing people take note, when you retire you can cash it all in at a market high for a fantastic profit , or perhaps regret this when the market rises again, or you can sell a bit at a time selling at a rate intended to get you out of the stock market at about the time that you die.
NO one knows exactly when they are going to die , butr actuarial tables can give you a good idea of what is likely , simularly no one knows the day to day direction of the market , but a study of trends can give one a good idea of what is likely.