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Dow Closes Above 10,000 for First Time in a Year

The Dow Jones industrial average closed Wednesday above 10,000 for the first time since Oct. 3, 2008. Ray Suarez speaks with a Washington Post reporter about the significance.

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  • JIM LEHRER:

    Wall Street hit a comeback milestone today. The Dow Jones industrial average closed above 10000 for the first time in a year. Stocks rose in part on upbeat earnings reports. The Dow gained more than 144 points, to finish near 10016. The Nasdaq rose 32 points, to close at 2172.

    And oil topped $75 dollars a barrel for the first time this year. It's been rising on hopes for a recovery and on weakness in the dollar.

    Ray Suarez has more of our lead story coverage.

  • RAY SUAREZ:

    And, for that, we turn to Frank Ahrens. He covers the markets and the economy for The Washington Post. And he joins me from the Post newsroom.

    Frank, you and I were talking earlier about what was behind the Dow's return to 10000 from its trough earlier this year.

    What can you tell us?

  • FRANK AHRENS:

    Right. The market bottom really began in March 9, and it's been the financials, the big banks, the Goldman Sachs, the J.P. Morgan Chase, which reported third-quarter earnings today that really gave the Dow that last sort of bump up above 10000 it needed today.

  • RAY SUAREZ:

    So, this is really about the financial industry, and not a broader look at the American economy?

  • FRANK AHRENS:

    Yes, that's certainly what has led it.

    And think of it this way. The financials were down so far, I mean, we were on the edge of a financial abyss this time last year. And these financials, the stock, A, was so low, so they had a long way to come back up. But, B, they're a big beneficiary of the government bailout, billions and billions of dollars.

    So, in many ways, this has been a taxpayer-fueled rally, which is interesting, because a lot of individual investors have stayed on the sidelines, because they're wary of it, for good reason.

  • RAY SUAREZ:

    The Dow is a closely watched index, but it's only a snapshot of a small number of stocks. What about the other ones that look at the market more broadly? Are they way up as well?

  • FRANK AHRENS:

    Since the early March bottom, both the Dow — all three, the Dow Jones, which is the 30 blue chip stocks, the S&P 500, 500 very big companies, and the Nasdaq, which is very tech-heavy, they have all had a good rise.

    The tech stocks have actually sort of been among the stronger companies that have led this surge. All three are up over 50 percent since March. Now, that's starting to level off a bit. I mean, you had the big surge from March until about September. Then it's starting to level off.

    Now we have to look and see what third-quarter company earnings are going to show us, whether this can be a self-sustaining recovery or if it's only really kind of a Red Bull, sort of caffeinated recovery.

  • RAY SUAREZ:

    Do these index rises tell us that investors have come to a different conclusion about the market's near future than employers have, for instance?

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