Magazine article Black Enterprise

The Dow Tops 10,000

Magazine article Black Enterprise

The Dow Tops 10,000

Article excerpt

How the market milestone will affect your portfolio

Boy, what a climb. In last year's June issue, BLACK ENTERPRISE predicted that the Dow Jones Industrial Average would rise to the 10,000 mark. On March 29, the prognostication held true: the Dow closed at a lofty 10,006.78. Within two days, however, the industrials retreated to 9,786.16 due to profit-taking, fears of an interest rate hike, renewed inflation worries and the prospect of war in Kosovo.

By April 5, investor skittishness had subsided. On the first trading day of the second quarter, the Dow shot up 174.82 points to 10,007.33 in response to the Labor Department's report that the unemployment rate was 4.2%, the lowest since February 1970. It confirmed institutional and individual investors' optimism about the vigorous economy. Moreover, the news drove other indices to record-shattering highs: the Standard & Poor's 500 rose to 1,312.12, overshadowing its top performance on March 18, and the Nasdaq Composite Index jumped to a record 2,560.06 points, surpassing its best showing on February 1. By April 7, the Dow surged another 121.82 points to 10,085.31 (see BE Indicators).

Which stocks led the rally? You guessed it. Shares of Internet and technology stocks such as Yahoo! (Nasdaq:YHOO), America Online (NYSE:AOL) and International Business Machines (NYSE: IBM) vaulted to new highs on hopes of strong first-quarter earnings and industrywide consolidation. Other active issues were Microsoft (Nasdaq: MSFT), Intel (Nasdaq: INTC) and Cisco Systems (Nasdaq: CSCO), the market leaders BE recommended over the past few months. …

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