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| New York Stock Exchange |
The Dow Jones Industrial Average closed below 10,000 on Monday, for the first time since November, hit by falls in all its financial components on concerns about the recovery and sovereign debt problems. The blue-chip measure of 30 stocks, dropped 103.84 points, or 1%, to 9908.39, led by a 3.5% dip in Bank of America. It had first crossed the level in March 1999.
This could all be termed déjà vu all over again, as the Dow has see-sawed across the 10,000 level 57 times (according to The Wall Street Journal) since it first crossed the threshold on March 29, 2009 and from a balcony at the New York Stock Exchange, New York City Mayor Rudolph Giuliani gaveled the session closed and tossed commemorative baseball caps with the slogan “Dow 10,000″ into crowds at the closing bell.
Last September, The New York Times said that the enthusiasm over the level of 10,000, is now a decade-long phenomenon. Reporter Jack Healy said: Consider this: President Bill Clinton was in office when the Dow first closed above 10,000 in March 1999. It retreated in the years after the dot-com bubble deflated, then retook 10,000 in late 2003 and peaked at 14,000 in October 2007. We all know the cataclysm that followed. So Dow 10,000 does not mean that the market is finally edging ahead; it is simply catching up to where it was a decade ago. “It’s been a bad 10 years, a really bad 10 years,” said David Bianco, chief United States equity strategist at Bank of America/Merrill Lynch.
Healy said the constant march of inflation also dilutes the meaning of 10,000. Prices rose an average of about 2.8 percent each year in the last decade, meaning the Dow would have to reach about 13,200 in today’s numbers to equal its value then. If this limbo seems dreary, imagine spending the next decade talking about Dow 10,000.
US stocks have fallen for four straight weeks, the longest losing streak since July 2009 and on Monday, the S&P 500 dipped 0.9% to 1,056.74. The Nasdaq closed down 0.7% to 2,126 - - the Nasdaq's all-time closing high of 5,048.62 was in March 2000.
Traders on Monday were reported to have cited a report in The Wall Street Journal on Monday that Fed Chairman Ben Bernanke is preparing a plan that the central bank will follow once the economy shows more signs of recovery, as one of the triggers for the day's decline.
In 1966, the Dow came within 20 points of hitting 1,000; it moved above 1,000 in 1972, but it wasn't until 1985, that it exceeded 1,500.
The Dow peaked at 381.17 on Sept 3, 1929. It crashed on October 28 and 29, 1929, falling from 301 to 230 or 23.6%
One year after the peak, the Dow closed at 237.54, down 37.3% from its peak. It continued to slide until July 8, 1932 where it bottomed at 41.22, down 89.2% of its value over 2.5 years
The Dow did not cross above 381 again until Nov 23, 1954, over 25 years after its 1929 peak.
The Dow peaked at 14,164.53 in October 2007.
Dow Jones Milestones from 1896
The worst decade for US stocks since the 1820s
