(By
Jason Simpkins) The last time
Dow Jones Industrial Average
hit the 10,000 mark, it was plummeting from an all-time high of
14,163.53 as shell-shocked investors sought shelter from the worst
financial crisis since The Great Depression. But this time around the
blue chip index was on the upswing, surging 1.4% yesterday (Wednesday)
to a close of 10,015.86.
Of course, it's not necessarily the number 10,000 that investors should be focused on; it's how we got there.
"This rally is about much more than a number," Richard Ross, chief technical strategist at Auerback Grayson, told Forbes.
"We have a market and an economy that is in the process of one of the
greatest comeback stories ever told. To ascribe any importance to an
arbitrary line detracts from the true drivers of the rally."
And while there have been many drivers of the current really there are two main catalysts for the rise to 10,000:
- Strong Corporate Earnings
- The Return of Risk Appetite
Earnings Energizing the Market
Stellar earnings were a major factor in yesterday's surge to 10,000.
A blowout third quarter for JPMorgan Chase & Co. (NYSE: JPM) sent its shares and more than 600 other stocks 52-week highs.
JPMorgan delivered its strongest performance since the financial
crisis first took hold two years ago, as the company reported a
six-fold increase in third-quarter profit. The bank made $3.6 billion,
or 82 cents a share in the three months through September, up from $527
million, or 9 cents a share, a year earlier.
That was far better than Wall Street was anticipating.
Analysts polled by Thomson Reuters Corp. (NYSE: TRI) expected the company to report a profit of $2.03 billion for the quarter, or 52 cents a share, according to CNNMoney.
What's more is that the rally could be extended today (Thursday) when JPMorgan's chief rival Goldman Sachs Group Inc. (NYSE: GS) reports its earnings. Goldman reported record earnings in the second quarter,
with revenue of $13.8 billion, compared with $9.43 billion in the first
quarter and $9.42 billion in the second quarter a year earlier. Net
income rose to $3.44 billion, or $4.93 a share.
"We have got JPMorgan [Wednesday], we have got Goldman Sachs [Thursday]," David Morrison, market strategist at GFT Global Markets U.K. Ltd. told Reuters.
"There has been a lessening of competition within the
investment-banking arena. Activity is basically picking up. There has
been expectation that both banks should do very well.
