The Dow Jones Industrial Average DJIA +0.28% closed at a record level after rising 45.47 points, or 0.3% to 16,580.84, reported Bloomberg today. The so-called "Obama stock market rally" continues it spectacular climb, from the ashes of a crashing economy and a crashing stock market. The Dow bottomed on March 6, 2009, when the DJIA hit a market low of 6,443.27.
From there, the DJIA has skyrocketed to new heights, deserving the name, the "Obama stock market rally."
The Dow's last record-breaking peak occurred on December 31, 2013, so there's something to be said for finally reaching a new level in 2014. The S&P 500 ended just shy of a record close, and the Nasdaq also ended the day higher, though the gains were modest.
Two related events occurred today that impacted Wall Street reported Marketwatch.com. First, the Federal Reserve Board, led by Fed Chair Janet Yellen, stayed the course and despite a grim growth in the first three months of the year, decided to keep moving slowly toward the exit of its bond-buying stimulus plan, trimming its bond-buying strategy by $10 billion to $45 billion for the fourth straight meeting. The fed felt that the economy has gained traction recently after the sharp slowdown, trimming its monthly asset purchases for its fourth consecutive $10 billion cut.
At the same time, the Fed repeated that it’s likely to keep the benchmark interest rate near zero for a "considerable time" after bond purchases end.
The second event came before the bell this morning, ADP released its latest report, as its reported that private employers hired 220,000 more workers in April, the highest monthly total this year. ADP said professional and business services led all sectors this month with 77,000 additional jobs followed by the trade, transportation and utilities sector with 34,000. Construction gained 19,000 jobs. Manufacturing added 1,000 jobs.
ADP's report raises optimism about Friday's closely followed Labor Department report on April employment.
Many analysts are expecting a jobs report this Friday from the Department of labor's Bureau of Statistics to report at least a growth of 200,000. Anything less than 200,000 April jobs would most certainly be a deep disappointment.
The decision by the fed came on the heels of a report that showed the economy barely grew in the first three months of the year. However, weather was blamed for the downturn in the quarter.
The Commerce Department said the economy expanded at a 0.1% rate in January, February and March, an abrupt deceleration from 2.6% growth in the last quarter of 2013.
"Who would imagine we would get a first-quarter GDP print so disappointing and yet we're closing the stock market at a high. That shows investors are absolutely looking past the first quarter, and looking to the Fed to continue with lower rates," said a senior market strategist at Everbank, Chris Gaffney. "The Fed has given investors what they were expecting, and investors like that stability."
Bloomberg - Dow Hits Record as Fed Trims Stimulus as Economy Improves
ADP jobs report - April private-sector report
Marketwatch - US stocks rise after Fed move; record finish for Dow
USA Today - ADP report