Wall Street made history on Wednesday, when the Dow Jones Industrial Average, soared past the high it reached over five years ago before the financial crisis struck. The DJIA, comprised of 30 major American corporations, including Coca Cola Exxon Mobil and Microsoft, closed the day at 14.254 as compared to 14, 165 on Oct. 9, 2007.
As the index surged, traders, analysts and investors took to the Twittersphere to express their emotions and predictions. Some were euphoric about the new high, interpreting it as a sign of the improving U.S. economy, while others were cautious, even suggesting that it could quickly reverse.
Morgan Stanley’s chief executive James Gorman told the New York Times that it would “help individuals through their 401ks and other investments.” But Gorman, who one would think would be more bullish, added, “That being said it was a very fast move, and prudent investors could be well served to trade carefully and look for improving economic evidence to support any moves to higher levels.”
As far as speed goes, no one cited the role of electronic trading or technology in sending the DJIA to new heights. One source told me: “I don't see a connection between algorithmic trading and the Dow's new highs. I think the Dow is mostly tracking macro sentiment and pricing in inflation expectations as all the central banks print ‘unlimited’ quantities of money.”
Skeptics saw the stock market’s rise as artificially stimulated by the Federal Reserve through its QE2 program pumping up the money supply and holding interest rates low. And still others, reacted as if the results confirmed the disparity between the wealthiest one percent and the rest of the country. While Wall Street was not dismissing the rally, the New York Times said, “they weren’t cracking open the champagne, either.”
Here is a sample of market sentiment as Wall Street professionals and Main Street reacted in tweets:
Though the celebratory mood was short lived on Wall Street, many professionals were optimistic, pointing to earnings increases and low interest rates as reasons why retail investors should start investing in stocks again.
#DowHigh equities one of the few places to invest to grow and hedge against inflation— Michael Trotter (@MA_Trotter) March 5, 2013