The Dow Jones Industrial Average has topped the 26,000 mark for the first time, a new landmark in the Wall Street stock market boom that has gathered pace since the new year.
The leading index of US shares has risen 1,000 points in just 12 days – and six stock market trading sessions, given that Wall Street was closed for Martin Luther King Jr Day on Monday – fuelled by an upswing in the global economy and the prospect of bumper company earnings thanks to Donald Trump’s corporate tax cuts.
The Dow added almost 280 points in early trading in New York, hitting a high of 26,081 before falling back below the 26,000 mark towards lunchtime. The biggest gains were for pharmaceutical company Merck & Co, health insurer United Health and digger manufacturer Caterpillar.
The Dow took 19 trading sessions to rise from 24,000 to 25,000 on 4 January and is up more than 40% since Trump’s election in November 2016. Sceptics have dubbed the latest phase of the bull market a “melt-up”, with US shares continuing to rise despite looking overpriced by traditional yardsticks, and warn it could be a last hurrah before a downward correction or crash.
However, the US economy is currently going through one of its longest-ever periods of expansion, only surpassed by the booms that took place in the 1960s and the 1990s before the dotcom crash. The US has now been growing without a correction since June 2009, following the recession that followed the financial crisis.
Inflation and interest rates have remained low around the world, helping to fuel the stock market boom, as the biggest countries’ central banks pump billions into their economies through quantitative easing.
In the UK, the FTSE 100 dropped by about 13 points to 7,755.93, as European shares dipped slightly after strong gains in recent weeks.
However, Bitcoin slid as much as 18% on Tuesday to a four-week low, leaving it just above $11,000 amid fresh fears of a regulatory crackdown.
guardian.co.uk © Guardian News and Media Limited 2010
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