Word: dows
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Dates: during 1990-1999
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...thing other than Alan Greenspan that seems able to slow an exuberant stock market right now is a shrinking unemployment rate. So after the government released a report this morning showing that the nation's jobless rate dropped to 4.8 percent in July, matching a 24-year low, the Dow promptly fell nearly 120 points. While the White House was quick to claim credit ("The strategy of balancing the budget, while investing in our people and selling more American products around the world, has helped to produce sustained prosperity for Americans," Clinton said), markets slowed out of fears that...
...long can it last? Even though the economy is jumping, unemployment and inflation are low and the Dow is at a record high, Americans remain pessimists. The Conference Board's index of consumer confidence dropped to 126.5 in July, down from 129.9 in June and well below the 130 that Wall Street analysts had predicted. Sure, consumers said they feel great about the state of the economy right now. It's the future they're worried about. Everybody from the federal government to the fully invested cabdriver is laying plans for the downturn, or even the crash they fear...
...analysts are finding an insidious side to this seemingly logical procedure. The knock is that index funds are a perpetual investment machine, mindlessly buying the stocks that constitute the index, so as cash rolls in, the index moves higher, without regard for the prices being paid. Critics say the Dow Jones industrial average, which passed 8000 last week, did so well ahead of its rightful time in part because index funds (Dow stocks are in the big ones) are getting so much money to invest. Their conclusion: the indexes have become bloated with overpriced stocks and can't help getting...
...investors have caught on to their appeal: index funds cost little to run, compared to actively managed funds, so more of the profits are passed on to investors. Index funds are also easy to track since they move in near perfect tandem with popular indexes such as the Dow Jones industrial average or the Standard & Poor's 500. And for three years running, returns on the index funds have trounced that of the average stock fund. No wonder assets in stock-index funds have increased tenfold in five years...
...nothing to latch onto. There is no sign of inflation, and the economy still seems to be slowing. The only worrisome area is labor, where the scarcity of workers might push wages up, but even that's just minuscule right now." Reassured investors sent the Dow up 154 points on the day for a new record close of 8061.65. Kadlec says Greenspan has softened in one way: he'll let traders have their fun. "I think mainly what Greenspan signaled today is that these days, he needs more than just an inflated Dow before he steps in and pricks...