Stocks push through psychological barrier

The Dow Jones Industrial Average which measures the stock value of 30 of the country's largest companies ended the day at 13,005. It is the first time it has closed that high since May 19, 2008, right before all the bailouts, layoffs and other recessionary results.

We did not know it at the time, but the market was already well on its way down to a point where in less than a year the market and many retirement plans would lose half their value. The low point was March 9, 2009 when the index had dropped in ten months from 13,028 to 6,547.

In the nearly three year rally since, the Dow has virtually doubled (+ 99%).

But the market still has a ways to go. The index is still eight percent short of where it was at its all-time high (14,164) in 2007.

We focus on the Dow as the best known index, but does it reflect the overall market?

Not always, but in the last five years, the three main indices, the high-tech NASDAQ composite, the Dow, and the S&P 500 have moved together changing virtually in step with each other.