Dow Hits All-Time High, Gaining 61% from the Lows of October 2002

After nearly six years and eight months, yesterday the Dow Jones Industrial Average rose 56.99 points to finish at a all-time record high of 11727.34, past the old record close of 11722.98 set on Jan 14, 2000. This last surge that began in mid-July, pushed the blue-chip average up 9.2% in less than three months. However of the 30 stocks in the Dow average, only 10 have surpassed their levels of January 2000. 

Taking inflation into account, the Dow still is 20% from its old record. After surging 25% in 2003, the Dow was up 3% in 2004, and fell 0.6% last year.

The Dow's 61% gain from the closing low of 7286.27 on Oct. 9, 2002, remains below the 85% average total gain for bull markets since 1900. The Nasdaq composite index has doubled since its own 2002 low, and the Standard & Poor's 500-stock index is up 72%. The S&P 500 would have to rise 14.5% to get back to its record of 1527.46 reached in March 2000. 

The biggest Dow gainers are Altria, maker of Marlboro cigarettes and Kraft cheese, up 214%; equipment-maker Caterpillar, 151% higher; industrial conglomerate United Technologies, with a 103% gain; and Boeing, up 86%. Microsoft, for all its gains this past summer, remains down 46% since Jan. 14, 2000. Intel is off 60%. General Motors -- not one of the '90s big winners -- has fallen 59%. In January 2000, the world's biggest stock as measured by stock-market value was Microsoft. Today, it is Exxon Mobil, whose stock is up 56% since then.

Back then, the S&P 500 traded at more than 30 times its member companies' earnings for the previous 12 months -- more than double the historic price-earnings ratio of about 15. Since then, stocks haven't risen as fast as corporate profits. So today, the S&P 500 trades at a less expensive 17 times earnings.

From its 2000 high to its 2002 low, the Dow fell 37.85%. The Nasdaq Composite Index plunged 77.93% during the period. (Dow Industrials Close at a Record)

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