What's in a number? On Wall Street, traders will tell you the Dow Jones Industrial Average topping the 20,000 mark is not that big of a deal. Mostly symbolic, they say.
Even so, since the market began its post-election rally, there has been anticipation that the Dow milestone would be achieved before the end of last year. However, the rally lost steam in the last two weeks of 2016.
It would be left to 2017 – Wednesday, January 25 to be precise, when the Dow Industrials opened at 20,018, less than a week after the inauguration of Donald Trump as the 45th President of the United States. The market's march toward 20,000 has been referred to as "the Trump rally," though evidence suggests it slightly predates election day, before anyone anticipated a Trump victory.
The Dow Industrials closed at 17,930 on November 3 and rallied by 2,070 since then, an increase of 11.5% in about two months. At the same time, the S&P 500, a measure of the broader market, rallied 9.3% over the same time.
Big banks led the way
The Dow was led higher mostly on the strength of big bank stocks, whose share prices have languished in a low interest rate environment. Banks surged on the OK belief that rates would rise and that many regulations on banks would be rolled back in the new administration.
The Dow crossed the 10,000 threshold three times – the first time on March 29, 1999, at the height of the dot-com boom. After crossing the 10,000 market in 2002, the market crashed in 2009, finally getting back above 10,000 the following year.
Where does the market go from here? Lots of brave prognosticators are already talking about Dow 40,000. They point out that it took 15 years for the Dow to double from 1,000 to 2,000 and 12 years to go from 2,000 to 4,000.