Supported by the massive monetary stimulus of the Federal Reserve and a gradual recovery in the world’s largest economy, the New York Stock Exchange’s benchmark index set a new high on Tuesday.
The Dow Jones Industrial Average, which includes 30 of the largest firms traded on the NYSE, touched an intraday high of 14,286.37 points, above the level of 14,198.10 points it had reached in October 2007, before the global financial crisis.
The DJIA stood at 14,253.77 at Tuesday’s close of trading, also a record.
The previous record close came on Oct. 9, 2007, when the DJIA reached 14,164.53, shortly before the start of the worst and most prolonged economic crisis in the United States since the Great Depression.
Recession and financial turbulence drove the index down to 6,547.05 at the lowest point, in 2009, but over the past several years it has been slowly recovering.
The landmark levels on the Dow came on a day when other macroeconomic figures confirmed the slow but sustained improvement in the U.S. economy: the services sector, which represents more than three-fourths of the national economy, grew in February at its best pace in a year.
“While you continue seeing improvements in the basis for economic growth you’re going to continue seeing gains in the securities markets,” IHS Global analyst Gregory Daco told Efe on Tuesday.
Other analysts, including the head of investment strategies for Destination, Craig Gentry, told Efe that the main catalyst of the stock market rally is the Fed’s ongoing program of massive bond purchases.
“The markets know that the Fed and the rest of the world central banks are supporting the economy, which is causing a disconnect with the real economy,” said Gentry.