Dow surges to new closing high
The stock market is back.
Five and a half years after the start of a frightening drop that erased $11 trillion from stock portfolios and made investors despair, the Dow Jones industrial average has regained all the losses suffered during the Great Recession and reached a new high. The blue-chip index rose 125.95 points Tuesday and closed at 14,253.77, topping the previous record of 14,164.53 on Oct. 9, 2007, by 89.24 points.
"It signals that things are getting back to normal," said Nicolas Colas, chief market strategist at ConvergEx Group, a brokerage. "Unemployment is too high, economic growth too sluggish, but stocks are anticipating improvement."
The record suggests that investors who did not panic and sell their stocks in the 2008-2009 financial crisis have fully recovered. Those who have reinvested dividends or added to their holdings have done even better. Since bottoming at 6,547.05 on March 9, 2009, the Dow has risen 7,706.72 points or 118 percent.
The Dow record does not include the impact of inflation. Adjusted for that, the Dow would have to reach 15,502 to match its old record, according to JPMorgan Chase.
The Standard & Poor's 500, a broader index, closed at 1,539.79, 25.36 points from its record.
Still, the Dow high is another sign that the nation is slowly healing after the worst recession since the 1930s. It comes as car sales are at a five-year high and home prices are rising.