The Dow Jones Industrial Average and S&P 500 Index rallied to exceed record highs (nominal) on Thursday, July 11.
The Dow’s previous all-time high of 15,409 was reached on May 28, and S&P’s 1,669 was reached on May 21. Today, investors sent stocks higher on remarks by Chairman Ben (Bernanke) that he’s not in a hurry to ease his stimulus measures, or at least not as fast as the market had predicted.
So what led up to this? A recovering housing market and last Friday’s better-than-expected June employment helped. This week so far, stocks have been buoyed by solid corporate earnings.
All of this enthusiasm has some analysts crying foul and predicting a pullback. While others say that the transition from bonds to equities has barely begun.
Right now is probably a time to hold and see. There are still some signs of economic weakness that could thrash U.S. markets–China, Egypt (driving up oil to their highest since May 2012), unemployment, and Greece/Europe. And in addition, avoid emerging markets.