After traders celebrated what was cynically dubbed “Dow 10k 2.0” just 5.5 months ago, the Dow Industrials is now just a small hop away from regaining the 11,000 level. Once it reaches that level, the Dow will have rallied 68 percent from its March 2009 low. Although that surely is an impressive 1-year rally, keep in mind the blue chip index first closed above 11,000 nearly 11 years ago on May 3, 1999. That was a mere one month after it celebrated the 10,000 milestone for the first time.
Still, the Dow’s swift and steep 4,500 point rebound over the past year should not be overlooked. Putting the duration of the current rally in perspective, the Dow needed more than double the time (2.5 years) to attain that same point advance back over a decade ago. Recall, the Dow first closed above 6,500 in November 1996, climbed through numerous milestones, and then closed above 11,000 for the first time in May 1999.
Here’s a quick snapshot of the Dow’s road back since its lows last year:
3/9/09 – Dow closes at a 12-year low (6,547.05)
3/12/09 – Dow closes back above 7,000
4/3/09 – Dow closes back above 8,000
7/23/09 – Dow closes back above 9,000
10/14/09 – Dow closes back above 10,000
Since the Dow regained the 10,000 level in October, 6 of its 30 components have dropped in price (ExxonMobil down 7%, JPMorgan Chase down 3%, Bank of America down 3%, and Chevron down 1%, Pfizer down 1%, and Coca-Cola down fractionally). Meanwhile, 5 stocks have contributed over 40% of the index’s gains in that period:
Biggest Impact on Dow Since 10/14/09
- Boeing (+153 Dow points)
- United Technologies (+76 Dow points)
- McDonald’s (+73 Dow points)
- Caterpillar (+64 Dow points)
- American Express (+50 Dow points)
Remember, the Dow Industrials is a price-weighted index, so price changes, not percentage changes, help determine the impact of each stock in the index.
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