BabuK
JF-Expert Member
- Jul 30, 2008
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New York's Dow Jones share index set a new all-time high on Tuesday, returning to levels not seen since before the global financial crisis.
The Wall Street index reached 14,245 in early trading, exceeding the previous record intra-day high of 14,198, set in October 2007.
The recovery in the market suggests investors are regaining confidence in the US economy.
That is despite the ongoing fiscal crisis in Washington.
The Dow has more than doubled in value since it plummeted to less than 6,550 points in the depth of the crisis in March 2009.
Returning confidence Investors have been encouraged by the strong growth targets set out by China's new leadership this week, and a jump in European retail sales.
More broadly investors have been encouraged by signs of recovery in the US housing market in recent months, and a return of consumer confidence.
"Key data is turning supportive. Companies are ready to re-invest and grow profitably. With luck, we will see a recovery take hold in the second half of the year," said Paul Atkinson, head of North American equities at Aberdeen Asset Management.
"The question now is whether we are seeing a stealth rally in danger of running its course… or whether we have the conditions for further market gains."
US consumer confidence rebounded unexpectedly in February, while data suggesting strong sales of new homes has been particularly encouraging, as housing construction has typically played a leading role in past US recoveries.
There are also signs big businesses are beginning to invest in capital spending rather than build up their cash piles, and are hiring more staff.
Analysts also say the commitment of central banks to quantitative easing (QE) and low interest rates has helped create optimism among investors, and made stocks and shares more attractive than bonds.
On Monday the vice chairman of the US Federal Reserve, Janet Yellen, said the central bank should press on with its QE programme, in which it spends $85bn (£56bn) a month on buying bonds.
Its actions have outweighed concerns over the continued US fiscal crisis in Washington and recent fears that political instability in Italy might impact the wider eurozone.
But some investors warn that the US recovery remains sluggish. The economy grew at an annualised rate of just 0.1% in the last three months of 2012, data published last week showed.
The Wall Street index reached 14,245 in early trading, exceeding the previous record intra-day high of 14,198, set in October 2007.
The recovery in the market suggests investors are regaining confidence in the US economy.
That is despite the ongoing fiscal crisis in Washington.
The Dow has more than doubled in value since it plummeted to less than 6,550 points in the depth of the crisis in March 2009.
Returning confidence Investors have been encouraged by the strong growth targets set out by China's new leadership this week, and a jump in European retail sales.
More broadly investors have been encouraged by signs of recovery in the US housing market in recent months, and a return of consumer confidence.
"Key data is turning supportive. Companies are ready to re-invest and grow profitably. With luck, we will see a recovery take hold in the second half of the year," said Paul Atkinson, head of North American equities at Aberdeen Asset Management.
"The question now is whether we are seeing a stealth rally in danger of running its course… or whether we have the conditions for further market gains."
US consumer confidence rebounded unexpectedly in February, while data suggesting strong sales of new homes has been particularly encouraging, as housing construction has typically played a leading role in past US recoveries.
There are also signs big businesses are beginning to invest in capital spending rather than build up their cash piles, and are hiring more staff.
Analysts also say the commitment of central banks to quantitative easing (QE) and low interest rates has helped create optimism among investors, and made stocks and shares more attractive than bonds.
On Monday the vice chairman of the US Federal Reserve, Janet Yellen, said the central bank should press on with its QE programme, in which it spends $85bn (£56bn) a month on buying bonds.
Its actions have outweighed concerns over the continued US fiscal crisis in Washington and recent fears that political instability in Italy might impact the wider eurozone.
But some investors warn that the US recovery remains sluggish. The economy grew at an annualised rate of just 0.1% in the last three months of 2012, data published last week showed.
