Dow Jones index hits record high
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CHARLOTTE – The Dow Jones Industrial Average hit an all-time record Tuesday, closing at 14,254 points, erasing losses during the Great Recession.
Just minutes after the opening bell on Wall Street, the Dow surged past the previous record of 14,164.
"It's good news. I mean obviously it's good news," said John Connaughton, an economist at UNC Charlotte.
He said the market is doing well in spite of mandatory federal government spending cuts that began last Friday.
"I think most of the American public as well as most American investors look at that as a circus sideshow."
The last time stocks traded at this level was on Oct. 9, 2007 before a devastating recession.
"What happened to us over the last several years was really, truly terrifying for a lot of people," said Diane Willis, a certified financial planner with Wilshire Financial.
Since then, the recovery has been shaky.
"More people are starting to finally take what was on the sidelines and they're starting to finally get back into the stock market," Willis said.
But the Census Bureau reports median family income is eight percent lower than the last time the Dow hit record heights.
"What we're seeing at the corporate level is companies having figured out how to make money and provide returns to investors in this economic environment," Connaughton said.
Optimism about the Chinese and European economies powered Tuesday's surge.
"What's going on in the stock market is measuring something completely different from what's going on in the economy and what's happening to the average family," said Connaughton.
Willis said the average family shouldn't have a knee-jerk reaction to the market.
"It's not a reason to say now is the time to do something in particular. We need to take a longer term perspective on it."