Our Economy Needs “Fixing”
April 25th, 2007
Today the Dow closed at a record high of 13,089.89 just 128 days after it broke the 12,000 mark.
April 25 (Bloomberg) — The Dow Jones Industrial Average surpassed 13,000 for the first time after profit reports from more than half of its 30 members bolstered speculation that the biggest U.S. companies will weather slower economic growth.
The Dow reached the milestone 128 trading days after breaching 12,000, about 15 times faster than the previous thousand-point advance. The average, consisting of companies with a median market value of $117 billion, recovered from its biggest one-day slide in four years after first-quarter earnings at Citigroup Inc. and Caterpillar Inc. this month beat analysts’ estimates.
Dow members are about 21 percent cheaper than in October, when the index first climbed above 12,000, based on the ratio of prices to historical earnings. USAA Investment Management, Bank of America Capital Management and LPL Financial Services, which manage about $727 billion, say the shares may rise more this year as demand from fast-growing economies buoys profits.
“This is the rare exception where you’ve had a bull market without P/E expansion,” said Ronald Sweet, who helps manage about $37 billion at USAA in San Antonio. “Having good earnings reports for this first quarter is setting up the scenario we were viewing for this year — slower U.S. economic growth with corporate earnings still holding up.”
The Dow average, created in May 1896 by Dow Jones & Co. to measure the performance of industrial companies, climbed 1.1 percent to a record 13,089.89 today after first-quarter earnings at Boeing Co. surpassed analysts’ estimates. Profits for the gauge’s members have risen in 16 straight quarters.
Raised for 16 straight quarters. I believe that would be the last four years. Four years in which Bush has been President and his economic policies have been in full force.
The only “fixing” our economy needs right now is for Congress to extend the tax cuts set to expire soon and not raise the taxes. Who knows? They might become Republicans themselves if they just think they did it.
Look for the market to be down tomorrow as speculators cash in.
Written by Jeanette
Posted in Economy
