Last Friday, the Dow Jones hit 11,000 for the first time since September 2008, and on Monday it managed to close above this watershed. What does that actually mean, though? Commentators are divided on whether this psychologically significant milestone heralds a more concrete recovery.
- Number Says Nothing in Particular At The Washington Independent, Annie Lowrey
points out the obvious: "the number 11,000 is no more meaningful than,
say, 7 or 912,384." The "macroeconomic fundamentals" remain what they
- Boosts Confidence, argues Adam Shell at USAToday. Sure, the economy is still struggling, but "economists
say a sharp rise in stock prices and the resulting rise in the value of
stock portfolios and 401(k)s held by Main Street investors could create
a feeling of financial well-being," giving the economy another bit of a push.
- Is there Confidence, Though? The Atlantic's Daniel Indiviglio looks at "hedging behavior" that "could indicate that ... investors know they are enjoying the upside of an unsustainable bubble."
- Entices Investors Back to Stocks The Wall Street Journal's Paul Vigna
also thinks the psychological effect of the number is important, but
for a different reason: "These big, round numbers always attract
attention, and the bulls hope this one will be enough to convince all
those recalcitrant investors to come back to equities."
- 11,000? That's All? Actually, points out Time's John Curran,
the day's gains were "a mere 8.62 points or 0.08%, hardly the kind of
jump you would hope for on news that Greece was going to be rescued."
He also notes that "the Dow's good news was not endorsed by its bigger
cousin, the S&P 500."
- Interpreted With the Help of a Timeline The Washington Post's Frank Ahrens,
though he tempers the good news with warnings from financial analysts
over a "bit of a market pull-back," explains what this number means for
The Dow is working to recover to its historic
high of more than 14,000, hit in October 2007, when the collapse began.
At 11,000, that means the Dow is about 78 percent back to where it was
at its peak. And, if you didn't shuffle around your retirement
investments and other portfolio holdings too much, you know that you're
about 78 percent back to being whole, too.
Want to add to this story? Let us know in comments
or send an email to the author at
hhorn at theatlantic dot com.
You can share ideas for stories on the Open Wire.