Dow Jones hits key 14,000 level - for a minute anyway

Friday 01 February 2013 18.20
Dow Jones has passed 14,000 level only 15 times in its history
Dow Jones has passed 14,000 level only 15 times in its history

The Dow Jones briefly topped 14,000 at one stage today, a milestone not seen since before the financial crisis rocked the markets and the world economy.

After rising steadily in early trading thanks to the US jobs report, the Dow briefly crossed 14,000 around 10am (US time).

The milestone was by a hair - the highest the Dow reached was 14,000.97 - and it lasted only a moment. 

The Dow has crossed 14,000 only 15 times in its history. The last time was October 2007.

And on just nine of those days did it manage to close above 14,000 at the end of trading.

That time more than five years ago seems almost a different era - before signs of the devastating financial crisis were apparent to the average observer. Lehman Brothers still existed. So did Bear Stearns, Wachovia and Washington Mutual.

US housing prices were starting to ebb, but they had not cratered. The unemployment rate was 4.7%, meaning jobs were abundant.

The Dow is an index of 30 big companies, and its purpose is to represent how the broader stock market is faring. And while hitting 14,000 would be an important psychological milestone, it would not be much else.

The stock market is more a representation of how traders are feeling about the economy than the economy's underlying fundamentals. And many investors do not even think the Dow is the best way to track the market: They prefer the much bigger Standard & Poor's benchmark index, which follows 500 companies, because they think it represents a more accurate view of the economy.

Overall, the government jobs report that pushed stocks forward was mixed, but traders chose to focus on the positive. The US said it added 157,000 jobs in January, which was in line with what traders had been expecting. Unemployment inched up to 7.9% from 7.8% in December.

But, encouragingly, the government also reported that hiring over the past two years has been higher than it originally thought.

The jobs number is based on a survey of employers, and the unemployment rate is based on a separate survey of households, which is why they can diverge.

In Europe, tentative and incremental signs of a recovery were enough to push up stocks in France, Britain and Germany. December unemployment in the European Union was lower than analysts had feared, inflation unexpectedly fell, and a survey raised hopes of some growth in the manufacturing sector.

But there were also reminders that the debt problem is far from solved. The Netherlands was also forced to take over one of its major banks, to try to stave off a collapse. In Greece, dock workers extended a strike over the government's spending cuts.