Stock Markets Rally, Bringing Dow, Nasdaq To Highest Levels In Years
The stock market's recent wild run is like one of those mass UFO sightings: Everybody sees it, but nobody believes it.
The Dow Jones industrial average closed Friday at 12,862.23, jumping 156.82 points to its highest close since May 2008, back when Lehman Brothers was still a going concern.
The Nasdaq composite index jumped 1.65 percent to 2905.66, its highest close since December 2000 -- that's almost within shouting distance of the peak of the tech-stock bubble.
The broader S&P 500 index, which probably makes up the biggest chunk of the average person's 401(k), jumped 1.5 percent to 1,344.90, but has no sexy historical comparison to brag about. It's still a little lower than it was last July.
Nevertheless, this is a big rally, resulting a 16 percent rise of the S&P since Thanksgiving, and it has been driven largely by better-than-expected economic data, the biggest of which was this morning's jobs report for January.
We at The Huffington Post did as much context-placing as we possibly could with that report, reminding people of the millions still out of work and the depths from which the economy still has to climb.
But as single economic reports go, it was a good report. Some on Wall Street even think it's a game changer, the signal of a new phase in the recovery.
Of course, head fakes have appeared before: Eonomic data improved dramatically early in 2011, too, before Japan's earthquake and Europe's debt-quake brought the recovery to a screeching halt.
And Europe still has the potential to disrupt everything. Greece still hasn't reached agreement with its private creditors, and Portugal's sovereign debt is increasingly under pressure.
Mutual fund investors have tiptoed back in the past three weeks, putting more than $2.1 billion into equity mutual funds during that time, according to the Investment Company Institute. But that follows two weeks with investors yanking nearly $14 billion out of stock funds.
That has been the pattern for much of the past three years: Stocks have had hair-melting rallies, and mutual-fund investors have been reluctantly dragged back into the market. Will mom-and-pop investors be a little more willing to believe this time?