Submitted by: Veronica Coffin
- The historic milestone leaves the Dow up a stunning 1,667 points since President Donald Trump’s victory in November
- The achievement is evidence of how optimistic investors have become about the prospects for the U.S. economy
- Wall Street is betting that Trump’s plans to slash taxes, ramp up infrastructure spending and cut regulation will make the American economy grow faster
- The jump in stocks is also a reflection of the solid economy Trump inherited from President Obama
- Jobs have been added for a record six years and three months straight, with unemployment close to a 10-year low.
The Dow Jones Industrial Average, the most famous equity index benchmark on Wall Street shot above 20,000 for the first time, at the open Wednesday.
The blue-chip stocks index quickly blew through the much-anticipated milestone in the opening seconds of trading, culminating a US rally in the wake of Donald Trump’s election, in anticipation he will produce pro-growth policies.
About four minutes into trading, the Dow was 20,007.77, up 0.5 percent.
About four minutes into trading, the Dow was 20,007.77, up 0.5 percent – and kept rising
A trader wears a Dow 20,000 hat on the main trading floor as the benchmark was passed
The index came within a point of the historic level on Jan. 6, as investors banked on pro-growth policies and tax cuts from the new administration.
But the venerable index had stalled recently, dropping modestly in consecutive weeks, as investors grew cautious as they looked for clarity on the administration’s new policies.
‘A seminal moment. It is just a number but it is a big number, it is certainly a flashy number,’ said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
‘There is a real belief that Trump is real, he has been extremely active these first couple of days of the presidency and a change may happen faster than people had thought.’
The rally comes in the wake of Donald Trump’s election, in anticipation he will produce pro-growth policies. He has been extremely active the first days of office
The Dow took a brief dip when Trump was elected in November, but quickly rebounded and has risen ever since. This graph shows from Nov 1 to the moment it broke 20,000 Wednesday
If the index remains above 20,000 by closing time, the 42-session surge from the first close above 19,000 would mark the second-shortest length of time between such milestones.
The 24 trading days between 10,000 and 11,000 from March 29 to May 3 of 1999 was the fastest.
The rise from 18,000 to 19,000 took the Dow 483 trading sessions.
The move since Nov. 22, when the index closed above 19,000 for the first time, has been spearheaded by financial stocks – with Goldman Sachs and JPMorgan accounting for about 20 percent of the gain.
The two banks have benefited as investors bet that Trump’s expected fiscal stimulus will trigger inflation and stoke a rise in interest rates.