NEW YORK: The Dow Jones industrial average closed above 14,000 on Friday for the first time in more than five years.
Sure, it was just a number on a board. But it was enough to raise the hopes of some investors and cause others concern about an overheated market. And it brought reminders of a different era, back before the financial crisis rocked the world economy.
The Dow Jones industrial average, a stock market index that is supposed to be a benchmark for how the entire market is faring, had been rising fairly steadily for about a month. On Friday, strong auto sales and optimism about U.S. jobs pushed it over the mark. The Dow is now just 155 points away from its highest close ever.
The Dow ended Friday 149.21 points higher to 14,009.79. The S&P 500 rose 15.06 to 1,513.17. The Nasdaq composite index was up 36.97 to 3,179.10.
“There’s a newfound enthusiasm for the equity market,” said Jim Russell, regional investment director at U.S. Bank Wealth Management in Minneapolis.
But market watchers were divided over what the Dow milestone — or even what a potential new high — really means. To some, it’s an important booster to hearts and minds, making investors feel optimistic and thus more willing to bet on the market.
“The Dow touching 14,000, it matters psychologically,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. “It attracts smaller investors.”
Since April 2011, investors have pulled more cash out of U.S. stock mutual funds than they’ve put in, according to the Investment Company Institute. In the past three weeks, though, that trend has reversed, which could make January the first month in nearly two years where stock-focused funds had a net inflow.