Dow industrials hit pre-crash 13,000 landmark
The US stock market has reached a major landmark in its journey back from lows hit during the financial crisis.
The Dow Jones industrial average closed above 13,000 for the first time since 19 May 2008, just four months before the collapse of Lehman Brothers.
Analysts say it reflects a growing confidence in the US economy and solid profit reports from US companies.
The Dow added 23 points, or 0.2%, on Tuesday to close at 13,005. It briefly topped 13,000 earlier this month.
"I think it's a momentous day for investor confidence," said Jack Ablin, chief investment officer at Harris Private Bank.
"What this number implies is that the financial crisis, that we were all losing sleep over, it never happened because now we're back."
While the Dow has added 6.5% this year, other measures of market performance have performed even better.
The S&P 500 is up 9% and the Nasdaq composite, which is dominated by technology stocks is up 14%.Growing confidence
The last time the Dow was at 13,000 Lehman Brothers was still in business. Within a few months it was gone and the old-style investment banking model fell apart. The only two remaining independent investment banks are Goldman Sachs and Morgan Stanley. Still, those financial firms that remain have become even more powerful. ”
The recent gains mark a turnaround after a volatile period during the summer of 2011, when investors appeared frightened by the prospect of the gathering European debt crisis.
The US was flirting with the possibility of default on its debt repayments amid a political battle in Washington over the debt ceiling, and worsening economic news.
But economic data has improved in recent months, and while Europe's debt crisis is far from resolved, the situation is seen as more stable than for some time.
"Two months ago, we were talking about a double-dip recession. Now consumer confidence is growing," said Ryan Detrick, senior technical strategist for Schaffer's Investment Research.
"A major milestone like 13,000 wakes up a lot of investors who have missed a lot of this rally."