Market Insider

Why the Dow's 1,000 point gain isn't as impressive as it used to be

Traders work on the floor of the New York Stock Exchange on November 18, 2016.
Brendan McDermid | Reuters

Flush with optimism about a Donald Trump presidency and what it means for the economy and markets, equities have soared this month, but the Dow Jones industrial average's gain of more than 1,000 points is not nearly as noteworthy as similar moves have been in the past.

For November, the Dow is on pace to rise more than 1,000 points. If it does close this much higher, it will be only the fifth time ever, according to data from FactSet.

As of 10:15 a.m. ET, a gain of 1,062.93 points for the month translated to a jump of 5.9 percent. This is the smallest percent increase the index has posted for a jump of more than 1,000 points. In contrast, the first time the Dow jumped by 1,000 points — in April 1999 when it shot 1002.88 points higher — that translated to a gain of 10.3 percent.


Bruce Bittles, chief investment strategist at Baird, called the market's drivers fairly simple: "We're going from an anti-business environment to a pro-business one."

Bittles called the percentage move for the Dow of nearly 6 percent a "big deal," noting it's especially important considering the index is so large to start with.

While 1,000 points on the Dow matters, he thinks the next psychologically important number for investors is Dow 20,000 — a level it has never hit.

Bob Pavlik, Boston Private Wealth's chief market strategist, said the increase's magnitude is especially notable for retail investors.

"In a way, it's notable, because I think that Main Street pays attention to that kind of gain, although I think the professional investor pays attention to the percentage gain," Pavlik said.

A 1,000 point move serves to pull in these retail investors, he said.

"I think it also boosts their confidence not only in the stock market but in the economy," he added.