NEW YORK — The Dow Jones industrial average first closed above 13,000 on April 25, 2007. It had taken the Dow only 129 trading days, since the previous October, to rocket from 12,000. And it took less than three months from there to reach 14,000.
But already in that spring of 2007, there was danger ahead.
The Associated Press took note of the Dow’s milestone but said: “Many of the same worries that weighed on investors earlier in the year remain: rising energy costs, a slumping housing market and a possible credit crunch.”
The unemployment rate was 4.5 percent — utopian compared with today’s 8.3 percent. The economy was growing at an annual clip of 3.6 percent, but it had only seven more months of growth left before it slid into recession.
That fall, on Oct. 9, the Dow set a record high that still stands, 14,164.53. But swings of 300 points or more jolted the market all year, even before the record. And after the record, it was a bumpy ride down.
In addition to the significant economic changes that have occurred in the five years since the Dow first crossed 13,000, the Dow itself has changed too.
Insurance company American International Group was thrown out of the Dow club in September 2008, a week after it had to be rescued by the government. It was replaced by Kraft Foods.
Ailing General Motors and Citigroup were dumped in June 2009, when GM went into bankruptcy protection and Citi was part-owned by the U.S. government. Travelers Cos. and Cisco Systems were added in their place.
As then, the average contains 30 top-shelf companies that broadly represent U.S. industry. And while the Dow may be at the same level now as in April 2007, the fortunes of the stocks that make it up have varied widely.
The biggest winner, by far, has been McDonald’s. The stock price of the reliably profitable fast-food giant has slightly more than doubled since then. Including dividends, which the Dow average doesn’t take into account, McDonald’s is up even more, 140 percent.
The biggest loser has been Bank of America, down 84 percent. Woes stemming from the bank’s ill-fated purchase of mortgage lender Countrywide have weighed heavily on the stock. The only major bank stock that did worse over the past five years was Citi, down 94 percent.
