It's a buyer's market with Dow, NYSE stocks rising
By Matt Krantz
USA Today
Name just about any major stock market index and odds are it hit a record high this week.
Everything from the Dow Jones industrials, Dow utilities, small-stock Russell 2000 and New York Stock Exchange composite closed at or briefly topped high-water marks yesterday as investors celebrated signs the economy is gently slowing down but not falling off a cliff.
The Dow industrials, the commonly followed market benchmark, jumped 99.26 points to 12,416.76, beating its previous high of 12,342.55 on Nov. 17 and notching its first close above 12,400.
"Holy cow, Dow," says Michael Farr, president of investment company Farr Miller & Washington. "When people go home and check their portfolios, they're going to see more money."
At the same time, though, some investors may feel they're missing out on the new-high party. It's probably not surprising the Nasdaq composite index is still more than 50 percent from its high, given the overheated mania for dot-coms and tech that drove it earlier in the decade. But arguably the most popular index of them all for actual investments, the Standard & Poor's 500, is still 6.7 percent below the high it notched in 2000.
The reasons a new high is elusive to the S&P 500, however, are the same reasons explaining why many of the other indexes are doing so well, including:
Newly public companies can't be included in the S&P 500 until they've reported quarterly results for at least a year. And most IPOs are too small to qualify anyway, so this contribution is missing. The Russell 2000 includes IPOs, and it is adding 29 more today.
S&P 500 investors will get their turn, says Jack Ablin of Harris Private Bank. "The small-cap advantage is beginning to roll over," he says. "Quality is on sale."
