Dow index crosses 11,000 barrier
The Dow Jones industrials barely finished in the black Monday, but their rise was enough to mark another bull-market milestone.
The blue-chip index rose 8.62 points, less than 0.1Despite the modest size of Monday’s move, the crossing of another round number could have a positive psychological benefit.
“Over short periods of time, market moves like these are self-reinforcing. They tend to embolden consumers,” said Jack Ablin, investment chief at Harris Private Bank in Chicago. “It’s a big psychological boost to both Wall Street and Main Street.”
The Dow last closed above 11,000 on Sept. 26, 2008, the day regulators seized Washington Mutual in the largest bank failure in U.S. history. The index is up 68% from its 12-year low set in March 2009.
On Friday, the Dow crossed the 11,000 threshold late in the session but fell back just before the close. On Monday, it dipped below 11,000 in the last 10 minutes of trading before recovering.
Financial markets worldwide were bolstered Monday after the European Union detailed a financial lifeline it’s offering to the debt-burdened Greek government. U.S. stocks also got a boost from rising merger activity and optimism about first-quarter earnings reports starting to roll out this week.
After the closing bell, aluminum giant Alcoa reported a slightly better than expected operating profit.
After stumbling early in 2010, stocks have risen with few setbacks since Feb. 8, thanks to data showing surprising economic strength.
The market has kept defying analysts who say it has run ahead of the economy.
The start of earnings season brings a new test: Analysts expect profits of large companies to be up 37% on average from a year earlier.
“I don’t think earnings will be a catalyst to drive stocks higher here,” said Barry Knapp, equity strategist at Barclays Capital.
Nonetheless, he said, optimism about the economy means “the probability of a sharp decline is fairly low.”
The Dow first crossed 11,000 in December 1999 before that era’s bull market gave way in January 2000 to a 2- 1/2 -year bear market.
The next move above 11,000 came in January 2006, on the way to the Dow’s all-time closing high of 14,164.53 in October 2007.
nathaniel.popper
@latimes.com
