The Dow Jones industrial average surged above 9,000 for the first time Friday. Although the Dow fell just short of the milestone at the close, it marked a stunning comeback for a market barometer many were about to write off after a historic stumble just five months ago.
The Dow rose as high as 9,030.49 in early trading, but finished Friday with a 3.23-point drop at 8,983.41. Trading was heavy, and broad market indexes rose to new highs, with the NASDAQ stock market and the Standard & Poor's 500 list among those adding to Thursday's record finishes."I sit back in awe at the sheer power that this market has," said Russ Labrasca, senior vice president at State Street Research in Boston. "We've come very far, very fast, and that's because of the almost perfect balance between inflation, interest rates and earn-ings."
It wasn't that long ago that the outlook for the stock market was grim. The Asian financial crisis sent the Dow plunging 554 points on Oct. 27, its biggest one-day point drop ever. Many market watchers thought the end of the bull market had come.
While the market climbed back from its depressed levels, it was a wild ride, and few expected 1998 to be another record-setting year. The Dow had already climbed more than 20 percent for three consecutive years, and fallout from Asia was expected to subdue the party.
But after a shaky start in early January, the stock market's pace has hardly slowed this year. Concerns over the impact of Asia's troubles have waned in recent months and, while the U.S. economy remains strong, investors remain confident that inflationary pressures aren't on the rise.
The latest evidence of a cooling off of inflation came Friday with the Labor Department's report that U.S. unemployment inched up to 4.7 percent from February's 24-year-low of 4.6 percent.
"We are back to an economy that is still perking along and not overheating," said Steven Goldman, market strategist at Weeden & Co. in Greenwich, Conn. "This long economic recovery is rare, but all the ingredients remain in place for a healthy market."