Specialist Patrick Murphy, left, works at his post on the floor of the New York Stock Exchange Tuesday, Jan. 25, 2011. (AP Photo/Richard Drew) (AP)

Dow Jones closes below 12,000 benchmark after day of ups and downs

Amidst Obama's ponderings on tax reform the market failed to close above 12K a feat Wall St. hasn't seen since 2008


Peter Finocchiaro
January 26, 2011 10:45PM (UTC)

The Dow Jones industrial average, widely viewed as a barometer for market health, briefly rose above 12,000 earlier today, the first time since the economy hit the wall in autumn 2008.The blue-chip index crossed the threshold shortly after 10 a.m. ET, thought it dropped back below shortly thereafter. Over the course of the day, the Dow crossed the 12K threshhold several more times but finally dropped below the mark around 20 before the closing bell. The Dow closed at 11,985.

The benchmark came hours after President Barack Obama called for an overhaul on business taxes during his second State of the Union address in Washington, stating his interest in closing loopholes. The move would hopefully boost federal revenue as a means for lowering corporate taxes for the first time in a quarter-century.

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The news appeared to be enough to energize investors despite reports of weak corporate earnings. Here's are three other key reasons for the Dow's recent bullish behavior from today's news -- in bullet list form:

  • Better than expected reports on home sales also contributed to the bump. (Los Angeles Times)
  • While chasing a specific benchmark might seem arbitrary to some observers, hitting 12,000 could have an important psychological implications for market traders, drawing out hesitant investors from their bearish positions. (Wall Street Journal)
  • Market conditions bode well for continued growth. Perhaps the most interesting trend: The third year of a president’s term historically sees a robust stock market, encouraging news for the Obama administration. (SmartMoney)

Peter Finocchiaro

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