why did the stock market go over 11000??? oil, drug cos, Halliburton??

[bobbieinok]

and what relationship does the stockmarket have to what's really going on in the economy?

[still_one]

1. absolutely nothing

first of all the dow constantly replaces losers with winners

look at the total market for a more accurate measure

better yet look at the NAZ. At its high it was at 5000, now it is at 2300

don't believe the hype. These are idiots

[eallen]

2. Why does there have to be a reason?

The DOW has been fluctuating between 10,000 and 11,000 for the last two years:

http://chart.finance.yahoo.com/c/1y/_/_dji

For all we know yet, this is just a normal fluctuation within that range.

:hippie:

[chelsea0011]

3. The market likes the idea that GM will lay off 30,000 and

IBM is freezing pensions and airlines will force unions to take big cuts and so forth and so on. Oh, oil is killing now.

[SlipperySlope]

4. Because Bush is such a swell president

And Wall Street decided to throw him a love party.

[wishlist]

5. Lower gas prices, hope that interest rate increases ended and okay xmas

In addition to the sharp decline in oil and gas prices and the expectation that rate tightening is ending, some investors are upbeat because official govt statistics have been positive related to inflation and employment along with jump in consumer sentiment. Optimism may not be justified though in light of sharp recent upturn in gas prices and indications that inflation and interest rates will keep rising this year.

[NMDemDist2]

7. lower gas prices? where do you live? my gas has jumped $0.16 since

Christmas........

[applegrove]

6. Because the spending is all on War outside the USA. So inflation isn't

happening to force the economy to stop (stock market to stop). Wages being lowered and factory jobs being replaced with people opening small businesses - fight inflation inside.

So yes - the economy is sliced and diced.

[peanutbrittle]

8. Economic Policy Institute

I'm not following the stock market but, living here in Okla. I can see that the industries you have noted along with the military presence have blown the lid off of our local economy. Have seen some pretty good growth. Talking to many they say we are 4 years into a 6 year cycle (imagine that..LOL)

The basic problem is the separation of wealth whereas the big boys keep the profits without enough of it trickling down. Figure in the sweatshops, offshoring and outsourcing exacerbates the problem

Someone else here at DU posted this the other day which helps to understand the divide.


Economic Policy Institute

http://www.epi.org/content.cfm/pm110

What's wrong with the economy?
by EPI President Lawrence Mishel and Policy Director Ross Eisenbrey


1. Profits are up, but the wages and the incomes of average Americans are down.
Inflation-adjusted hourly and weekly wages are still below where they were at the start of the recovery in November 2001. Yet, productivity—the growth of the economic pie—is up by 13.5%.


Wage growth has been shortchanged because 35% of the growth of total income in the corporate sector has been distributed as corporate profits, far more than the 22% in previous periods.


Consequently, median household income (inflation-adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999, falling from $46,129 to $44,389.
2. More and more people are deeper and deeper in debt.
The indebtedness of U.S. households, after adjusting for inflation, has risen 35.7% over the last four years.


The level of debt as a percent of after-tax income is the highest ever measured in our history. Mortgage and consumer debt is now 115% of after-tax income, twice the level of 30 years ago.

The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%.


The personal savings rate is negative for the first time since WWII.
3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.
The United States has only 1.3% more jobs today (excluding the effects of Hurricane Katrina) than in March 2001 (the start of the recession). Private sector jobs are up only 0.8%. At this stage of previous business cycles, jobs had grown by an average of 8.8% and never less than 6.0%.


The unemployment rate is relatively low at 5%, but still higher than the 4% in 2000. Plus, the percent of the population that has a job has never recovered since the recession and is still 1.3% lower than in March 2001. If the employment rate had returned to pre-recession levels, 3 million more people would be employed.


More than 3 million manufacturing jobs have been lost since January 2000.
4. Poverty is on the rise.
The poverty rate rose from 11.3% in 2000 to 12.7% in 2004.


The number of people living in poverty has increased by 5.4 million since 2000.


More children are living in poverty: the child poverty rate increased from 16.2% in 2000 to 17.8% in 2004.
5. Rising health care costs are eroding families' already declining income.
Households are spending more on health care. Family health costs rose 43-45% for married couples with children, single mothers, and young singles from 2000 to 2003.


Employers are cutting back on health insurance. Last year, the percent of people with employer-provided health insurance fell for the fourth year in a row. Nearly 3.7 million fewer people had employer-provided insurance in 2004 than in 2000. Taking population growth into account, 11 million more people would have had employer-provided health insurance in 2004 if the coverage rate had remained at the 2000 level.

[elfin]

9. Because the Fed signalled that

interest raises are near their peak. That is the MAIN reason IMHO.

[sendero]

14. And ...

... I agree.

Folks should forget the idea that the stock market indexes, particularly the narrow Dow, bears any relation to the overall economic health of the country.

[HysteryDiagnosis]

10. Because things are going so swimmingly for the average

everyday American who doesn't have healthcare, a pension, SS, perhaps a roof and a future.

[Oversea Visitor]

11. Look

at natural gas futures, look at the drop :rofl:
Who understand all this
Move money right pocket to left pocket

[unblock]

12. between inflation and currency devaluation

$11,000 is not what it was back in 2001, the last time the dow was at $11,000.

so don't go thinking that the stock market is really "back" to where it was even back then, nevermind at clinton's peak.

[Stwo]

13. Dow not much of an economic guage

True. $11,000 is only 10,076 in 2001 dollars-- not much of a difference IMO. As a matter of fact it is not "back", its higher-- even adjusted for inflation. Without analysis of the PE's and other financial measures of the Dow members between now and a time in the past, the Dow alone is a pretty worthless measure of economic health.

[On the Road]

15. Oil, Drugs, Halliburton?

Yes, high prices for those goods and services would all increase corporate earnings, which is what drives the market. So those are all good reasons for the market to go up.

Basically, January is usually a strong month. Plus the Fed's announcement of ending rates hikes. Those are the big things.

But what I'm come to appreciate more over the last year is the extent to which the stock market reflects not so much the economy itself as the amount of capital available to be invested. There is a pool of currency in the world looking for a return. The money had been going into real estate since 2000, but that's probably topped out. Fixed interest is negligible. Where are people going to put those dollars? That's why the market doesn't crash, because there are still dollars looking for a home.

Oh, and those dollars are concentrated in the hands of the upper 1%. The Dow breaking 11,000 is reflecting, in this case, how much excess capital has piled up in the hands of the wealthy.

[fasttense]

16. Just remember how well the stock market was doing

right before the Great Depression. If it was an accurate indicator of economic stability and continued growth, it would have been gradually falling throughout the 1920s. Instead it suddenly and, to some, inexplicably hit a brick wall.

[Odin2005]

17. Because the fat cats are getting rich.