This is for personal, noncommercial use only.
Today's Front Page
Gas Buddy
Dow Jones industrial average passes 10,000 for first time in a year
Print this Article- Font Size:
- Default font size
- Larger font size
The seven-month stock rally on Wednesday pushed the Dow Jones industrial average above 10,000 - a milestone it last saw a year ago and first saw a decade ago.
Investors celebrated and called their brokers to see how much they have recovered since the stock market bottomed in March. Some wondered how much longer the rally would continue, while others affirmed their commitment to stocks.
"The rally has been very much of a relief. We were in such shock with the monthly account statements that we were not opening them," said Bob Sliwkowski, an investor in Margate. "Now we can't wait to see them."
Joseph McNally, of Mays Landing, said he is very happy with where his stocks are now.
"I'm back to where I was just before the October 2008 lows, plus I've taken my dividends out," McNally said.
The Dow finished Wednesday at 10,015, a gain of 144 points and an incredible 53 percent above its low for this year - and the past decade - in March.
Dan Walsh, a financial adviser with Edward Jones Investments in Margate, said that with 15 minutes left until trading ended, the phones started ringing nonstop as clients called to celebrate and check on their gains.
"Investors are starting to feel more optimistic" about the economic recovery and the rebound in the market, he said. "A lot of people are feeling like the train is leaving the station and they don't want to miss it."
Some publicly traded companies with a strong presence in southern New Jersey have ridden the rally higher.
Boyd Gaming, co-owner of the Borgata Hotel Casino, was one of several whose stocks hit bottom for the year with the rest of the market on March 9. From $3.08 that day, it rose to $12.81 on Sept. 18 and closed Wednesday at $11.51.
Parke Bancorp bottomed at $4.26 in March, peaked at $9.89 on Aug. 20 and closed at $8.90.
TD Bancorp gained steadily from its February low of $26.23 to a high of $64.45 on Sept. 30, but dropped more than 6 percent the next day as a computer glitch delayed deposit postings to customer accounts. By Wednesay it had gained most of that back, closing at $64.06.
Some area companies, however, have seemed immune to the rally. Cape Bancorp closed at $6.61 Wednesday and Sun Bancorp at $4.72, both much closer to their lows for the year than their highs.
Many stock analysts think the market will struggle to rise much higher, given the slow recovery of the economy and the worst unemployment in a generation.
Walsh said a correction - a pullback in stocks of 5 percent to 15 percent of value - can happen anytime in the market and certainly after a seven-month-long rally.
The Dow average peaked in October 2007 at 14,164, then plunged as the financial meltdown hit and credit markets froze. By March, it was down to 6,547.
Since then, stocks have strongly trended upward, accompanied by steadily diminishing warnings that the gains have been a bear rally - illusory gains in the midst of a longer term decline.
Walsh said the doubts remaining about the strength in stocks can be taken as a good sign that the psychology driving the bull market remains intact.
"As they say, bull markets are born on pessimism, grow on skepticism and end in euphoria," Walsh said. "I feel that there's still some skepticism out there, but it's starting to turn toward optimism."
For McNally, investing is not about optimism or pessimism, but commitment.
He said he stayed fully invested in stocks right through the crash and the rebound.
"You can't panic, that's my theory," McNally said. "A lot of people just dumped everything and I'm sure they'll be sorry they did."
Sliwkowski also remained in stocks, even though his retirement account was off almost 46 percent from its high in 2007.
"I'm 72 and I've been through a number of these recessions, and ups and downs in the market," Sliwkowski said. "Fortunately, we're rebounding, and now it's down 28 percent, about half of what it was."
He said in years of investing he could never time the market and doubted anyone else could consistently.
"Basically, you make sound investments and then stay the course. That's what I think you have to do," he said.
E-mail Kevin Post:
Posted in Top_three, Business on Wednesday, October 14, 2009 6:15 pm Updated: 6:38 pm.
No comments have been posted. Be the first poster!
Click here to report a comment as abusive.