The Dow Jones Industrial Average has pierced its all time high water mark today, closing at an unofficial 16,580.84, up 45 points from the previous closing, and breaking the previous record of 16,576.66, set on December 31, 2013, by $4.18. The good news spread to the Standard & Poors, which gained five points, and the NASDAQ, which picked up 11 points on the day.
It was a day for high fives and fist bumps on The Street because the market does not put in a new Dow Jones lifetime high all that often. The rising market was a little surprising to some analysts because of the disappointing GDP estimate, up just .1 percent in the first quarter of 2o14. The market was expecting to see a 1.2 percent economic growth figure.
Founded in 1885, the Dow Jones has been the litmus test for the American economy for 129 years, tabulating the winnings and losses on a minute by minute basis throughout the trading day on the basis of the performance of a “laundry basket” of 30 of the most important industrial corporations in the country.
ADP, the payroll specialists, reported 220,o0o new jobs in the private sector for the month of April. The company also reported that it was upgrading the March figure from 191,000 to 209,000 new jobs.
The jobs figures bolstered an otherwise lackluster performance in the first quarter of the year. The Federal Reserve kept the pot boiling by continuing its recent practice of injecting an additional $45 billion into the economy through asset purchases. It was the fourth consecutive $10 billion cut in support for the economy by the Central Bank. The markets like the way the Fed is gradually turning down the heat under the economy by slowing reducing its support rather than by hiking interest rates.
Because of the sheer size of the Industrial Average, it tends to swing more widely than they do on the other exchanges, making small movements seem larger than they really are. The Dow Jones bump is likely to disappear over the next few days, as traders sweep up their winnings on the March contracts, but in the ebb and flow of markets, the U.S. is clearly flowing, rather than ebbing.
By Alan M. Milner
Look for me on Twitter:@alanmilner