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. Last Updated: 07/27/2016

Dow Hits 10,001.1, Markets Jubilant




NEW YORK -- The Dow Jones industrial average made history Tuesday as it topped the magic 10,000-point level for the first time ever, but the excitement was short-lived and business returned to normal as the index retreated.


The market closed at 9,932.69 at 4 p.m. New York time (midnight Moscow time). Earlier in the day, traders cheered on the floor of the New York Stock Exchange as the 10,000 number was reached.


At its early morning peak, the Dow gained 41.35 points to 10,001.12, climaxing an unprecedented 4 1/2-year show of force in which the Dow has soared 6,000 points.


But not all on Wall Street greeted the Dow 10,000 passage as a bullish event. Some analysts have viewed the market's latest surge, which has tended to be focused in well-known large stocks, as masking an underlying weakness.


"Dow 10,000 may bring tears of joy to the market, but it will be followed by tears of sadness because this market is so narrow," said Roy Blumberg, chief investment strategist at Chestnut Investment Group/Allied Securities.


And analysts cautioned that many investors not get wrapped up in the excitement of breaking the milestone.


"I don't think individual investors should put an emphasis on the Dow 10,000 - even though it is historic," said Ron Doran, director of institutional trading at C.L. King and Associates. "Stocks are still the place to put your money, but the short term looks a little overdone on the plus side."


The blue-chip index's rise to 10,000 shortly after the opening capped a run that was fanned for years by an ideal economic climate, low interest rates and the lowest inflation in decades.


At least one influential market watcher believes the market has a long way to go before reaching its ceiling.


"We're in a new bull market. This could be the start of a 'mega-market' lasting 12 to 15 years, similar to the boom markets that followed the First and Second World Wars," said Prudential Securities chief technical analyst Ralph Acampora.


The bulls have been at the wheel of the market, which many Wall Streeters have described as the "Greatest Bull Market Ever."


And certainly the Dow has been explosive this decade, breaching 9,000 in April of last year.


It stalled and later entered a severe decline as worries over the spread of a global economic crisis reached a fever pitch. But after a head-spinning drop below 7,500 in September and then again in October, the market proved its resilience, surging to 10,000 in a little over five months.


The dramatic rise was helped in part by the U.S. Federal Reserve's move late last year to cut interest rates three times in a bid to keep the super-charged U.S. economy from being dragged down by the economic crisis in Asia, Russia and Latin America.


Stocks have been rejoicing because the American economy has expanded at a record pace and corporate earnings have defied the economic law of gravity, more than doubling in the past decade.


The economic news is still rosy, even after all these years. On Tuesday, the U.S. Commerce Department reported that builders broke ground on new U.S. single-family homes at the fastest pace in more than 20 years in February, as a booming homebuilding industry barely missed a step.


Healthy corporate profits have spurred companies to invest more cash in new plants and equipment, which in turn has fuelled productivity gains and created even stronger earnings - and it was favorable earnings news helped the Dow hit the historic mark on Tuesday: Union Carbide Corp. led the blue-chip average higher, rallying 1 -1/4 points to 44-3/4 after the chemicals giant said its first-quarter earnings would on the high end Wall Street expectations.


The great market story has also been fuelled by an unprecedented flood of cash into stock mutual funds.


Much of the credit for the super bowl economy goes to the Federal Reserve, which has maintained an accommodating monetary policy, keeping interest rates low.


Among other stock market indexes, the Nasdaq composite index rose 6.48 points to 2,437.92. The Standard & Poor's 500 index was off 1.51 at 1,305.75.


Elsewhere, Britain's FTSE 100 index closed mixed. The blue-chip index ended 4.9 points, or 0.1 percent, lower at 6,201.9.


Germany's blue-chip Xetra DAX index maintained a gain of around 1 percent after Wall Street hit 10,000. The electronically traded Xetra DAX closed 47.70 points or 0.95 percent higher at 5,090.93 points, in floor trading the DAX rose 65.39 points or 1.30 percent to 5,094.63.


In Paris, the CAC index closed little changed, lacking conviction of morning gains as the Dow tracked back from its early advance to 10,000. The CAC-40 ended up 0.03 percent, or 1.23 points, at 4,186.35.


Tokyo's Nikkei average rallied to finish above the 16,000-point level for the first time since last August as the yen's rise against the dollar bolstered hopes for a recovery in Japan's economy. The Nikkei 225 average closed with a gain of 293.22 points, or 1.86 percent, at 16,072.82.