POCATELLO — The stock market is off to its best start in decades.
But the U.S. economy continues a three-year pattern of slow, steady improvement despite record-low interest rates and billions of dollars of stimulus and tax cuts.
The Dow Jones Industrial was up Friday 149 points to 14,010 and the Standard & Poor 500 rose 15 points to 1,513, its best start since 1997.
“That’s very exciting,” said investment specialist Tim Forhan.
Forhan said the 14,000 benchmark brings the market back to its 2007 average at the time the recession started.
The recession was caused by a shrinking gross national product, Forhan said, combined with the down turn in the housing market.
“Home sales and construction are the biggest drivers of the stock market,” he said
Forhan said construction stock and home building stock almost doubled in the past year.
Over time, he said the market will correct itself. But an attack in the Middle East would most likely cause the market to fall again.
“It’s like watching a piece of paper blow across the yard,” Forhan said. “It doesn’t just go up and down, it goes sideways as well.”
Macro Vision Research reports that the stocks that helped the market climb in January are companies in the defensive” sectors — such as health care providers and consumer staples producers.
Those industries continue to do well in a slow economy because people still need to buy medicine and basic goods like shampoo and diapers.
While Forhan said the Dow Jones is not the most accurate measure of the market, he said the increase is a positive sign.
“There are lots of indications that the economy is getting better,” he said.



(0) comments
Welcome to the discussion.
Log In