Dow hits 20,000 for first time ever
NEW YORK — After weeks of close calls, the Dow made history on Wednesday by blowing past 20,000 for the first time ever.
The historic milestone leaves the Dow up a stunning 1,667 points since President Donald Trump’s victory in November.
The achievement is evidence of how optimistic investors have become about the prospects for the U.S. economy.
“The stock market has given him this extraordinary vote of approval. Happy days are here again,” said Ed Yardeni, president of Yardeni Research.
Wall Street is clearly betting that Trump’s plans to slash taxes, ramp up infrastructure spending and cut regulation will make the American economy grow faster. If that happens, without any disruptions to global trade, it could propel corporate profits, the lifeblood of stock prices.
But the jump in stocks is also a reflection of the solid economy Trump inherited from former President Obama. The U.S. has added jobs for a record 75 straight months and the unemployment rate is sitting near a 10-year low.
The Dow 20,000 milestone also shows how much has changed in the U.S. economy over the past eight years. The index crashed to a low of 6,440 in March 2009 as Wall Street feared a complete collapse of the American financial system.
The astounding 13,500-point rise since then has been fueled by a consistent, albeit imperfect, economic recovery combined with the U.S. central bank’s massive stimulus program and near-0% interest rates.
While the economic rebound from the Great Recession has been slower than many hoped, the unemployment rate is now at the lowest level since 2007 and corporate profits have climbed to record highs.
“The economy has come a long way in eight years. Overall, it’s a healthier economy and does justify a much higher stock market than eight years ago,” said David Kelly, chief global strategist at JPMorgan Funds.