The Dow Jones industrial average hit a new milestone Tuesday, closing above the 15,000 mark for the first time in its 117-year history.
The Dow briefly cracked the 15,000 barrier last Friday, peaking at 15,009.59 before falling back below the mark later that day. On Tuesday, it closed at a new all-time high of 15,056.20, up 87 points, or nearly 1 percent — the latest in a string of record closes for Wall Street, which has put the recession in the rearview mirror.
Markets around the world were also up, reflecting rising investor sentiment that the U.S. economic recovery is firmly on track and the Federal Reserve remains committed to low interest rates. Investors also seem to believe that Europe is getting a handle on its financial crisis.
“The stock market has been on a strong run for several months now,” said Mark Hamrick, Bankrate.com’s Washington bureau chief. “I think the markets have put much of the Great Recession behind them as the economy has been expanding at a decent rate.”
The broader Standard & Poor’s 500 index has also enjoyed a nice run in 2013. The S&P closed Tuesday at 1,625.96, up 8 points, or less than 1 percent. It also broke the 1,600 barrier on Friday, and has held on to its gains.
The Nasdaq closed up more than 3 points or less than 1 percent at 3,396.63, well below a record high.
Analysts say investors are gaining confidence in the markets, which is fueling the recent gains.
“That’s really a vote of confidence in the economic recovery,” said Paul Edelstein, director of financial economics at IHS Global Insight. He pointed out that as the stock market has ticked up, bonds, which are viewed as a safer investment, have declined. That means investors are feeling safer about stocks, and see less of a need to hedge against possible downturns.
Wall Street has been chasing record highs for most of the year. The markets — the Dow, the S&P, and Nasdaq — are up about a combined 13 percent since the beginning of the year.
The Dow, the benchmark index of 30 top stocks, leads the way, up about 15 percent on the year. It hit a new all-time high in early March, blowing past the previous record of 14,164.53 on Oct. 9, 2007. The Dow has continued to climb over the last two months, jumping more than 800 points since then and eclipsing the 15,000 mark.
The S&P, the broader index, is keeping pace with the Dow, up 14 percent on the year. In late March, it also passed its previous all-time high of 1,565.15 set on Oct. 9, 2007. Since then, it has climbed nearly 4 percent or 60 points, breaking past the 1,600 barrier last week.
The Nasdaq, meanwhile, is up 10 percent on the year, but is no where near an all-time high.
But analysts also noted that, in one sense, the markets are just trying to recover the values lost in the slump that accompanied the recent economic downturn when the Dow took a sharp dive to as low as about 6,600 in March 2009. Mr. Hamrick called it a “roller-coaster ride that nearly broke your neck.”
“In some ways, we’re merely retracing all the ground that was lost during the Great Recession,” he said.
The financial crisis is a recent memory for all too many wary individual investors, many of whom are not ready to take another chance on Wall Street.