Grab your "Dow 10,000" caps, Fools. The five-figure index
is back.
You've probably heard by now: The Dow breached the 10K
mark today, on the back of stellar earnings from
Intel (Nasdaq: INTC) and
JPMorgan Chase (NYSE: JPM). Traders screamed.
Confetti fell. CNBC anchors giggled. I may have heard
celebratory gunfire. While they may be materially irrelevant,
these psychological barriers get investors riled up.
This milestone is exciting, of course. But who can forget
watching the Dow fall
below10,000 almost exactly a year ago? The words
"shock and awe" come to mind. What was then the sign of the
world coming apart at the seams is today a sign that recovery
has arrived.
As an example, I found this headline from last
October:
Panicked global markets reel, Wall Street plunges below
10,000 pts
And then this one from this morning:
Dow 10000: Relief, Recovery on Trader Minds
The same level, one year apart, with polar opposite
reactions. If that's not a sign of the powers of investor
psychology, I don't know what is.Â
More interestingly, it's been 10 years since the Dow first
crossed the 10,000 mark. Curious about what the financial
world looked like back then, I dug up a few broad metrics for
comparison:
Metric
1999
Today
GDP
$9.4 trillion
$14.4 trillion*
Unemployment
4.2%
9.8%
Fed Funds Rate
4.75%
Zilch
U.S. Population Continued... |