For the first time since early January, the DOW broke through the psychological 9,000 mark in today's trading.It has been a strong day for the market, with the DOW currently sitting at 9,080, a little off its daily high of 9,090.50.
Buyers have flooded into the market, spurred by news that existing home sales jumped last month. This is now the third month in a row with existing home sales. This is a good sign, and helped boost investor confidence that the housing market may be on its way to stabilizing.
According to the National Association of Realtors, existing home sales jumped by 3.6% during the month of June, with home prices still severely depressed compared to this time last year.
In addition to the news on existing home sales, the market is also being fueled by strong earnings from a wide range of companies including Ford Motor Company (NYSE: F), which put better than expected earnings for its second quarter. Ford is up over 9% in afternoon trading.
With so many big names reporting strong earnings this season, it is no surprise why investor confidence is rising. We have already seen strong numbers from a wide range of companies such as Apple Inc. (NASDAQ: AAPL), Goldman Sachs (NYSE: GE), and AT&T (NYSE: T), giving investors a major boost.
What are your opinions on the current state of the economy? Do you think the economy is starting to rebound? What do you put more emphasis on... strong earnings, or rising unemployment? At what point do you believe the recession will end?
Let us hear your thoughts.
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Reader Comments (Page 1 of 1)
7-23-2009 @ 7:17PM
Steve said...
I was reading some commentary that postulates a potential relationship between increased trading risk and this latest hit of DOW 9000.
I tend to agree; at the very least, traders must be very, very careful now. Short sellers will try to knock the market down now that a psychological level has been reached.
Of course, what plays in our favor is the age of the recession. Going back to DOW 9000 might actually now be a positive. It's difficult to say, but the implication is this: trade with extreme caution, sell into strength when you can, be wary of chasing momentum, and use tight stops.
7-24-2009 @ 4:44AM
al coholic said...
Current economic reality is that we are not significantly better off than we were when the Market was at 6400.
How could anyone draw any positives from the (statistically insignificant) housing sales numbers? The more important number is the new housing starts, which this year are hovering around 400,000. To give you an idea of how devastating that is, thirty years ago when we had a population 50 million smaller than today's we were cranking out a million new houses.
So thirty years later we are at about 40% of what we we were in 1979. Not to mention the fact that housing prices have declined not just in speculative areas like Vegas, SoCal and Florida but in every town in America.
The National Association of Realters is dreaming if they think a housing recovery is just around the corner.