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  • Writer's pictureThe San Juan Daily Star

Dow sprints past 40,000-mark on earnings boost, rate-cut bets

The Dow Jones Industrial Average breached the 40,000-point level for the first time ever on Thursday, its fastest 10,000-point climb, powered by strong quarterly results and rising bets of interest-rate cuts by the Federal Reserve.

The blue-chip index surpassed its previous record high of 39,935.04, hit on Wednesday, and has recovered nearly 40% from its October 2022 lows. At 10:40 a.m. ET, the Dow was up 0.2%, at 39,992.67.

“Breaking the 40,000 barrier is a big psychological boost for the bulls as round numbers hold special significance in people’s hearts and minds,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in a note.

“We are in a Bull Market and people are showing some irrational exuberance (meme stocks) and dismissing bad news (slowing retail sales) and focusing on good news (slightly slowing inflation).”

U.S stock markets have climbed since the start of the year, as investors bet on an AI-led rally, robust earnings and hopes that the central bank will ease monetary policy this year. All three major U.S. indexes hit fresh intraday record highs on the day. Of the 30 companies on the Dow, card company American Express and retail giant are among the biggest percentage gainers so far this year, up 29% and 22%, respectively. Chipmaker Intel, which trails other players in the surging market for AI components, is down 37% since the start of year, making it the Dow’s worst performer in 2024. Planemaker Boeing follows Intel with a 30% year-to-date loss after the Jan. 5 mid-air panel blowout on a MAX 9 jet rekindled concerns about safety. For the Dow, the journey to 40,000 from the 30,000-mark took a little more than three years, a faster climb than the previous 10,000-point clamber, at less than four years. It took nearly two decades for it to move from the 10,000-mark to 20,000. The index, which dates to 1896, first touched 10,000 in March 1999.

The Dow was last up 0.3% at 40,029. The S&P and Nasdaq were up as well.BONDS: U.S. 10-year yields were flat at 4.356%FOREX: The dollar index was last up 0.3% at 104.49.

“It’s a nice milestone but like any other milestone it will fade as time passes.”

“The rally today is a continuation of yesterday’s rally, and while that CPI report was good and should boost confidence it’s not going to alter the Fed’s timeline and investors should be aware of that.”

“The names that are driving the Dow are at least in part similar to the names that are driving the S&P and the Nasdaq.”

“There still is - and there will likely continue to be - a favoritism for large and mega cap stocks.”

“It is important, even though the Dow is not considered to be the leading index. Obviously, the S&P 500 and Nasdaq are considered to be more indicative of the market and of corporate earnings and investor interest.”

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