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What Dow 10,000 means
Why economists aren't so sure that crossing this psychological barrier is reason to celebrate
 

Talk about a comeback, said the AP's Sara Lepro and Tim Paradis in Yahoo Finance. "The Dow Jones industrial average has reclaimed 10,000 for the first time in a year." Traders on the floor of the New York Stock Exchange cheered when the market hit the psychological barrier, although analysts warn that rising employment and the weak housing market still threaten the recovery. Still, investors are clearly "shaking off lingering doubts about the economy."

Go ahead, "pop out the champagne," said Dan Burrows in Daily Finance. "But please indulge in just the slightest of sips. Breaking the key psychological level of Dow 10,000 is one thing. Holding onto those gains is quite another."

Sure, people are no longer afraid we're heading for financial Armageddon, said Chris Isidore in CNNMoney. But the rally for the Dow's blue-chip stocks can't go on much longer. "Even economists who agree the economy is in recovery say that growth will be slow and difficult, with continued job losses, tight credit and further declines in home prices." And even many who believe Dow 10,000 is justified don't think it can climb much higher before taking another painful dip.

 

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