5 March 2013
The most prominent U.S. stock index, the Dow Jones Industrial Average, surged to an all-time high in early trading Tuesday.
Within minutes of the opening bell at the New York Stock Exchange, the Dow's composite of 30 key stocks jumped past 14,200, surpassing the previous closing high of 14,164 recorded on October 9, 2007. That high-water mark occurred well before the U.S. and world economies plunged into the depths of a recession in 2008 and 2009, and stocks fell in lockstep.
Even now, the surge in the Dow comes as a contradiction to the overall state of the U.S. economy. The country's unemployment rate is still stuck at an historically high figure of 7.9 percent, with more than 12 million workers unemployed. And the country's economic advance has slowed markedly, up just one-tenth of a percentage point in the last three months of 2012.
In addition, U.S. President Barack Obama, the Democrat starting his second term, and his Republican opponents in Congress are locked in a long-running standoff over government spending and tax issues.
Just last Friday, $85 billion in mandated government spending cuts took effect, with Obama and Republican lawmakers now sparring over the effects of the cuts on the economy and the U.S. labor market.
But analysts say the Dow index has surged in part because of high corporate profits, an improving housing market and the fact that the country's central bank, the Federal Reserve, has continued to pump $40 billion a month into the economy to boost the economic fortunes of the world's largest economy. The Fed plans to keep interest rates low into 2015, another effort to spur economic growth.
The Dow index includes some of the best known U.S. companies, with such household names as the world's largest energy company, Exxon Mobil, the huge retailing giant Wal-Mart, and film maker Walt Disney. While other broad-based U.S. indexes, such as the Standard & Poor's 500, include the stocks of many more companies, the Dow has over decades come to symbolize the long-term success of American capitalism.