Dow Closes Above 12,000
The Dow Jones Industrial Average closed above 12,000 for the first time.
Oct. 19 (Bloomberg) — The Dow Jones Industrial Average closed above 12,000 for the first time after Coca-Cola Co.’s profit beat analysts’ estimates and Lehman Brothers Holdings Inc. predicted faster earnings growth for telephone companies.
The stock market is considered a leading economic indicator and this is good news for the economy. It doesn’t mean that there isn’t any weakness in the economy, but it is still good news. Further, overall, the index of leading economic indicators increased by 0.1% in September. The index Coincident indicators was steady and the lagging index was up by 0.2%.
There also seems to be speculation that the Federal Reserve will leave interest rates unchanged when they meet later this month.
Optimism about earnings growth and signs of easing inflation has pushed the Dow average up 2.9 percent this month. Stocks have also advanced on speculation the Federal Reserve will leave interest rates unchanged for the third consecutive month next week. Policy makers meet on Oct. 24-25.
Hopefully, Bernanke and the Fed can pull off the soft landing.
