Stock Market Rallies to Record
RENEE MONTAGNE, host:
The stock market hit a new high yesterday. The Dow Jones Industrial average closed up more than 280 points. The Standard & Poor's 500 index also reached a new high. And the NASDAQ posted hefty gains.
But the reasons why aren't as simple. Analysts have different takes on the stock market rally, as NPR's Jack Speer has been finding out.
JACK SPEER: Jeremy Siegel is professor at the Wharton School of Business. He has written several books on Wall Street. His view is the market was simply looking for an excuse to move higher and decided to latch onto some positive sales numbers from big box retailers Costco and Wal-Mart.
Professor JEREMY SIEGEL (Wharton School, University of Pennsylvania): Retail sales have been a concern. The subprime market has been a concern. Everyone has been waiting for something else bad to happen. And I think what's happened is they've turn around and said, you know what? I don't see these other bad things happening.
SPEER: But Alan Skrainka, chief economist at Edward Jones, had a different view.
Mr. ALAN SKRAINKA (Chief Market Strategist, Edward Jones): A lot of folks will point to the retail numbers, but I don't see anything there to write home about. I think the stock market is sensing a big bounce-back and growth in the economy and primarily looking at the trade report.
SPEER: Okay, admittedly the trade shortfall in May hit its second highest level of the year. But exports climbed to an all-time high as well. Other theories centered around takeovers, a slight dip in oil prices, and a weak dollar, which makes U.S. stocks look cheap to overseas investors. In essence, take your pick. The only people not necessarily happy - bond investors as money moved into stocks.
Jack Speer, NPR News.