After hovering near a major milestone for nearly two months, the Dow Jones Industrial Average set a new record.
The Dow is a composite index of 30 stocks that includes some of America’s largest companies. And, it broke through the 20,000 mark.The Dow represents industries that range from technology and energy to financials. What many major companies have in common is their large size, a demonstration of sustained growth and interest to a large number of investors.
In 2016, the Dow outperformed the other two main U.S. indices – the S&P 500 and the NASDAQ, which also were up.
One investment strategist said the Dow’s performance had led investors to look for stocks that pay high dividends.
The Dow and other indices also got a big boost after Donald Trump won the U.S. election. The hope is that he will lower taxes, decrease regulation and go on an infrastructure spending spree. Construction giant, Caterpillar, gained more than 35 percent in 2016 making it the year’s top Dow performer.
The turnaround happened after seven and half years, when the Dow Jones Industrial Average hit a low of 6629. That was on March 6th, 2009 – an impact of the global financial crisis. Since then, the index has tripled.
Many traders on the floor of the New York Stock Exchange said they never expected it to go so high. But it’s largely seen as symbolic, and few believe the number itself will impact behavior.
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