Global Headwinds No Match for Dow at 18,000 Milestone
– Bloomberg News
The Dow?s march to the 18,000 level had to overcome a long lineup of obstacles this year. None of them was a match against the Federal Reserve and the U.S. economy.
The Dow Jones Industrial Average rose 5.6 percent over the past five days for the biggest rally since 2011, climbing to 18,024.17 yesterday, as the central bank pledged patience in raising interest rates while data showed the economy roared the most in the third quarter since 2003. A measure of expected volatility in the Dow has fallen the most in three years during the recent rally.
U.S. equities faced upheavals in 2014 that threatened to derail a bull market in its sixth year, ranging from violence in the Ukraine to an Ebola outbreak and a bear market in oil prices. Yet the Dow?s worst retreat was only 7 percent, and the gauge recovered from each decline in about two months.
?Things have been getting better for five years,? John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said in a phone interview. ?Corporate America is doing fantastic, earnings are at an all time high, interest rates are low, inflation is low, and now you have the added positive of low gasoline prices. All of that adds up to a pretty good environment for equities.?
It?s been 172 days since the Dow closed above 17,000 on July 3, data compiled by Bloomberg show. That?s the fifth-fastest trip between thousands, with the record being 35 days to 11,000 in May 1999. It took the index almost 5,200 days to go from 1,000 to 2,000 between 1972 and 1987, according to Howard Silverblatt, an index analyst at New York-based S&P Dow Jones Indices.
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