The Dow Jones industrial average closed above 10,000 on Wednesday for the first time since last October.
“If you would have said to me back in March that the market would rally to 10,000 by October, I would have said you have been drinking too much,” said Sean Davis, president of Anyone Can Trade in Brighton.
The Dow rose 144.8 points to close at 10,015.86 on Wednesday, leaving it up 14.1 percent year to date. Since its low of 6,547.1 on March 9, the index of 30 corporate giants is up 53 percent.
A seven-fold increase in profits at JPMorgan Chase & Co., higher than expected sales at chipmaker Intel Corp., and a smaller than expected decline of retail sales in September helped push stocks higher.
“It is good news. As far as I am concerned, it is a line in the sand along the way to a higher goal,” said Paul Dickey, president of INS Capital Management, a Denver money manager.
Although 10,000 may be just another number, Dickey said that for many individual investors, crossing it represents a measure of lost ground now recovered.
The psychological lift it creates might result in people feeling good enough about their financial situation to go out and spend more, he said.
“For the people in the market, this is wonderful,” agreed Christine Tanner, a Denver investor. “We have benefited from this rally.”
But Tanner, while on a visit to an E-Trade brokerage office downtown, also expressed concern for those left behind because they no longer had jobs or had depleted their savings to get by.
And some investors remain skeptical given the speed of this market rally and the absence of evidence of a strong economic recovery.
“It moved a little too fast,” said Steve Diaz, a Denver resident trying to build up his nest egg in the market.
With 30 years until retirement, Diaz was hoping for more time to snap up shares at bargain prices. But he is encouraged that the market isn’t swinging wildly up and down like it did last year and early this year.
“It is stabilizing,” he said.
Davis, who trains people to trade stocks for a living, said he could understand a rally as strong as this one if it were accompanied by a strong rebound in economic activity.
But the evidence isn’t in yet. And if it fails to come in, he fears the rally will wilt.
“I am suspect of it,” he said of the Dow’s move upward.
The Dow first crossed 10,000 in March 1999 and has revisited that level more than a dozen times in the intervening decade. It remains significantly below the all-time high close of 14,164.5, reached on Oct. 9, 2007.
Gibbons Burke, the editor of , counts 13 distinct times where the Dow broke through the 10,000 mark during a trading day.
In 10 of those 13 times, the index continued to rise, gaining an average of 4.8 percent over the next 12 days. On three occasions, it declined an average of 1.3 percent.
“You get a fairly bullish pattern of how the market moves after that,” Burke said. “It is a psychological phenomenon.”
Other, more technical reasons suggest the market may keep going. The midpoint between the high that the Dow hit in October 2007 and the low it reached on March 9 is 10,334, a level Burke predicts the Dow could easily reach from here.
The Dow Jones industrial average long ago lost its stature as the bellwether for the health of U.S. stock markets to the broader S&P 500 index, Burke said.
But it remains the oldest and most widely recognized index for the general public.
“The Dow is kind of like the queen of England,” Davis said. “She doesn’t have that much political power anymore, but the British love their queen.”
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
