NEW YORK (CBSNewYork/AP) — After flirting for weeks with a huge milestone, Wall Street finally broke through to new record territory on Wednesday.
The Dow Jones industrial average broke through 20,000 points right at the opening bell. The index crossed the line, following record highs on Tuesday.
The Dow was up 102 points, or 0.56 percent, to 20,018. The Nasdaq rose 48 points, or 0.9 percent, to 5,600. The Standard & Poor’s 500 index rose 10 points, or 0.5 percent, to 2,290. Bond prices fell. The yield on the 10-year Treasury note rose to 2.51 percent.
“It is a sign, a symbol that shows Main Street and Wall Street that our economy is getting better,” equity trader Jonathan Corpina said.
Stocks, especially in the financial sector, have trended higher since President Donald Trump’s election, CBS2’s Brook Silva-Braga reported. The new president has promised market-friendly tax cuts, deregulation and infrastructure spending. On Tuesday, he cleared the way to restart two major oil pipelines.
But many economists and traders say the Dow milestone is more psychological than significant because the index is a measure of just 30 big U.S. companies.
The stocks that make up the Dow often change, some are weighted more heavily than others.
“The market is clearly endorsing the fact that the pro-growth policies that he’s promised — we haven’t seen them bear out yet — are going to be great for the market,” trader Peter Tuchman said.
So what does this mean for you?
“I believe that 2017 is going to be a good year for stocks,” COO of Landor & Fuest Capital Managers Robert Fuest told CBS2’s Alice Gainer. “I do believe it’s going to be volatile at times as news, geopolitics, and economic events unfold and people reevaluate their existing portfolios.”
Fuest says to not get overly excited by Wednesday’s record breaking performance.
“Stay with the market,” he said, “make sure the portfolio is appropriately diversified for the current times both nationally and internationally and then see hwo it unfolds over the next hundred to two hundred days because I do believe that we will see things change.”
When it comes your 401k, Fuest says don’t think about touching it.
“If you’re on the younger curve or you have at least 20 years to go I wouldn’t worry too much as long as it’s appropriately diversified,” he said.
In 1972, as the Dow first cracked 1,000 points, Kodak, Woolworth’s and Bethlehem Steel were members of the index.
Twenty-seven years later, the Dow broke 10,000 with the help of newly-added Hewlett-Packard and Walmart.
There were also major sell-offs.
In 2009, the Dow dropped below 7,000 points during the depths of the financial crisis. It has skyrocketed ever since, tripling in less than eight years.
Traders say healthy economic and jobs data, combined with high consumer confidence, could bode well for strong market performance in 2017.
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