The Dow Jones Industrial Average (INDEX:DJI) on Monday crossed the 18,000 threshold for the first time in nearly nine months, as stocks ripped higher despite sliding oil prices.
The Dow opened the day at 17,890, climbing quickly to 18,000 by 12:30 p.m. ET.
The milestone has no special significance other than as a psychologically significant level for investors. It also marks a dramatic turnaround from the market’s stumbles in the first days and weeks of 2016, which sent markets around the world tumbling. The DJIA fell to a low of 15,660 on Feb. 11, more than 10 percent below its Dec. 31, 2015, close of 17,425. The index has since risen 13 percent.
Stoking the rally are investors who have put worries over global growth prospects aside while ignoring the yo-yoing price of crude oil, which fell below $40 a barrel domestically after reports early Monday that talks in Doha, Qatar, to limit production had broken down. Stocks have also reacted positively to the first round of earnings reports from major banks and other companies, a majority of which have exceeded expectations.
Still, doubts remain as to whether the bull market can keep up for long. Corporate profit margins have been sliding since the third quarter of 2014, a trend that has typically presaged a general downturn. In a recent note, Goldman Sachs analysts warned that the only source of demand for stocks in the coming months could be corporations executing buybacks.
For everyone else, asset managers and hedge funders included, trepidation reigns. After hovering around 18,000 for a half-hour at midday, the index dropped back to 17,972 at 1:25 p.m.