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Dow industrials flirtation with 23,000 is a sign of the stock market’s velocity

MarketWatch logo MarketWatch 10/5/2017 Mark DeCambre

Brace for 23,000? © Provided by Dow Jones & Company, Inc. Brace for 23,000?

A resurgence in the so-called Trump trade has investors once again contemplating a fresh milestone for the Dow Jones Industrial Average.

This time the most well known and oldest U.S. equity benchmark is set to hit 23,000 for the first time ever, notching its fourth straight 1,000 point climb over the past 12 months. That would be the largest number of such 1,000 point moves within a calendar year in the benchmark’s 120+-year history, according to WSJ Market Data Group.

The Dow (DJIA) remains around 325 points away from the next milestone, but if it manages to clear it within the next 14 trading sessions, the blue-chip average would notch its third fastest climb to 1,000-point milestone since mid July (see table below).

To be sure, the higher the DJIA rises, the smaller each 1,000-point move is in percentage terms, but the climb to all-time highs has captured public attention, even if some market strategists and bears are concerned that valuations have gotten too lofty, too fast.

Dow milestones 1st close above that levelDow final closeNo. of trading days to milestone (ranking)
23,000?N/A?
22,000Aug. 2, 201722,016.24107
21,000March 1, 201721,115.5524 (1)
20,000Jan. 25, 201720,068.5142 (2)
19,000Nov. 22, 201619,023.87483
18,000Dec. 23, 201418,024.17120
17,000July 3, 201417,068.26153
16,000Nov. 21, 201316,009.99139
15,000May 7, 201315,056.201,460
14,000July 19, 200714,000.4159 (3)
13,000March 25, 200713,089.89127
12,000Oct. 19, 200612,011.731,879
11,000May 3, 199911,014.6924 (1)
10,000March 29, 199910,006.78246
9,000April 6, 19989.033.23182
8,000July 16, 19978,038.88105
7,000Feb. 13, 19977,022.4485
6,000Oct. 14, 19966,010226
5,000Nov. 21, 19955,023.55189
4,000Feb. 23, 19954,003.33975
3,000March 17, 19913,004.461,080
2,000Jan. 8, 19872,002.253,573
1,000Nov. 14, 19721,003.1621,652
Source: WSJ Market Data Group

So, why is the market headed higher?

Some of the recent gain has been attributed to optimism around President Donald Trump’s tax plan. That enthusiasm centers on the belief that he will implement Wall Street-boosting measures, like deregulation and tax cuts, that will pave the way for a further clamber higher for risk assets.

Check out:Low stock volatility won’t last forever, but the quiet may not end quickly

Since the 2016 election, won in shocking fashion by Trump over Democratic rival Hillary Clinton, the Dow has climbed 24%, the S&P 500 index (SPX) has advanced by about 19%, the Nasdaq Composite Index (COMP) has returned about 26%, and a popular index of small companies, the Russell 2000 index (RUT) has beat its large-cap peers, jumping more than 26%. That’s as of the close of trade on Wednesday.

So far, The Dow has registered 44 record closes, marking its most all-time high finishes in a single year since 2013, when it posted 52. The S&P 500’s 41 record finishes is the most since 2014, when it booked 53 record closes, the Nasdaq has posted 52 closing peaks thus far, marking its most since the 61 it recorded in 1999. If it notches more than 63 this year, it will mark the most records in a year ever.

Slightly rosier economic indicators of late, domestically and abroad, and upbeat expectations for corporate results, even if the bar tends to be lowered, also have helped buoy equity indexes.

It is no wonder why Wall Street investors are pointing at signs of a so-called meltup in stocks, and heralding the uncanny rise of assets in every sector, region and class.

Perhaps the biggest question is how rising rates off ultralow levels, as the Federal Reserve continues to tightening monetary policy, lifting borrowing costs on individuals and companies, will eventually affect this unabated rally.

—Ken Jimenez contributed to this article

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