Dow Hits New Milestone: 16,000
November 24, 2013
Synopsis: On Monday of last week the stock market hit yet another milestone as the Dow Jones average hit higher than 16,000 for the first time ever. The S&P 500 also hit a smaller milestone of its own with 1800 points. The Dow Jones has done nothing but climb this year. It hit 15,000 points in the beginning of May and that was three months after it hit 14,000. Talking with numbers, the Dow is up 22% this year. There are several reasons as to why it is climbing, but many believe it is because the federal government has set forth 85 billion dollars to buy Treasury bonds and mortgage backed securities. The goal of this is to make investors see that this makes bonds not so appealing to them so they turn to stocks. The program appears to be working with the results of the Dow.
Analysis: Stocks being on the rise is a great thing. It’s a sign that maybe our economy is starting to make a jump back. While the United States is not really in a recession anymore, everyone is still not thriving. Unemployment is still fairly high and companies are not necessarily hiring. I think that with the federal government stepping in and offering a large sum of money to buy bonds and jumpstart the stock market is a pretty good idea, but taking that away is when you see the reality of the stock market. This interference makes the stock market appear to be doing outstanding and if they quit the Dow would drop drastically. While the Dow appears to be doing great, investors still might not have the money to throw out. In the end, the program appears to make the Dow look great while behind the scenes it is not.