A board on the floor of the New York Stock Exchange shows the Dow Jones industrial average above 16,000 in intraday trading Monday. The stock market broke through two milestones Monday as a historic rally pushes stocks further into record territory.
NEW YORK ó The stock market broke through two milestones Monday as a historic rally pushes stocks further into record territory.
The Dow Jones industrial average topped 16,000 for the first time and the Standard & Poorís 500 index pierced 1,800. Both indexes are on track for their best year in a decade, and have soared more than 140 percent since hitting a Great Recession low more than five years ago. Stocks ended mostly lower after the market reached the two major milestones earlier in the day.
The S&P 500 fell six points, or 0.4 percent for the day, to close at 1,791. The Dow edged up 14 points, or 0.1 percent, to 15,976. The Nasdaq composite gave up 37 points, or 0.9 percent, to 3,949.
Three stocks fell for every two that rose on the New York Stock Exchange.
Investors are pushing stocks up sharply this year as the U.S. economy improves, companies report record profits and the Federal Reserve keeps up its easy-money policies.
ďThe Fed is still pumping money into the system, which is helping fuel the market,Ē said Frank Fantozzi, CEO of Planned Financial Services, a wealth manager. ďThereís much more confidence in the market.Ē
Investors are betting Fed policies are not likely to change soon. Janet Yellen, the nominee to succeed Ben Bernanke as Fed chairman, indicated in congressional testimony last week that she was prepared to keep interest rates low to stimulate the economy.
The S&P 500 index has risen for six weeks straight and is up 26 percent so far this year. The market hasnít risen that much in a whole year since 2003.
The S&P 500 has closed above major round-number milestones three times this year: 1,500 on Jan. 25, 1,600 on May 3 and 1,700 on Aug. 1.
The quick climb has led some experts to wonder whether stocks are too high and set to tumble. Including this yearís gains, the S&P 500 is up 165 percent from the start of the current bull market in March 2009, 56 months ago.
Bull markets back to the Great Depression have averaged 57 months, according to S&P Capital IQ, a research firm, however the duration of bull markets has varied greatly over time. The bull market of the 1990s lasted 113 months, for instance.
Also, itís not clear whether stocks are expensive relative to their earnings or just fairly priced. One measure of value, the ratio of stock prices to forecast earnings, is at 15 for S&P 500 companies. That is slightly below the 15-year average of 16.2, according to FactSet, a data provider.
At 2 p.m., the S&P 500 was up a point at 1,799. The index moved slightly above and below the 1,800 several times during the day. The Dow was up 48 points, or 0.3 percent, to 16,010.
Fantozzi of Planned Financial said investors may be buying stocks in response to news from the Chinese government Friday that it plans to open state industries to greater competition. Many big U.S. companies have come to rely on emerging markets like China to boost revenue. About half of the revenue in the S&P 500 comes outside the U.S.
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