The Dow Jones reached a record high today despite partisan gridlock in Washington that resulted in the “sequester” budget cuts becoming law just before the weekend. The Dow Jones industrial average surged to levels not seen since the recession began.
The Dow Jones reached 14,273.70 by noon today, surpassing the previous intraday trading record of 14,198.10. It has since dipped down to 14,252.75. Today’s jump follows China’s overnight announcement that it intended to increase spending in the coming year.
The market has benefited all year from the US Federal Reserve’s easy monetary policies and has largely ignored the constant stalemate in Washington that has resulted in manufactured budget crises every few months. Democrats and Republicans failed to compromise in time to prevent automatic across-the-board spending cuts Friday, and today’s stock market numbers reflect a market that has grown tolerant of political antics.
Since 2007, the housing market collapsed, the financial system melted, the European Union bailed out one country after another, and the US has been locked in a two-year long fiscal brawl largely between the White House and House Republicans. The Dow reached a low point in March of 2009 and has since doubled. The Dow’s continued ascent is a sign of the country’s gradual economic recovery.
The Dow tracks the stock prices of 30 large publicly owned companies. IBM carries the most weight, and Chevron Corp claims second at nearly half the price. Other household names such as McDonalds, Wal-Mart, and the Walt Disney Company also inhabit the list. The Dow Jones is both the oldest US stock market gauge and the country’s most famous. It was founded by Charles Dow on May 26, 1896.
Large companies have found shining success even as many Americans are still struggling to find work or wrestling with stagnant wages. The country continues to be plagued by increasing levels of income inequality.
[Image via ShutterStock]