Dow Jones Industrials Hits Record High; S&P 500 Not Far Behind

Just when we were getting accustomed to the S&P 500 getting to hit all the new record highs, here comes the Dow Jones Industrial Average, hitting a new record high of its own.

AFP

The Dow Jones Industrial Average gained 0.7% to 15,746.88–its 33rd this year, tying it with the S&P 500–led higher by Microsoft’s (MSFT) 4.2% gain, UnitedHealth Group’s (UNH) 2.3% rise and Chevron’s (CVX) 2.3% advance. Only three Dow stocks finished in the red today, including Nike (NKE), which dropped 0.6%, and the Home Depot (HD), which fell 0.3%. Yes, it was that kind of day.

The S&P 500 gained 0.4% to 1,770.49, its second highest close of the year.

Ned Davis Research’s Ned Davis looks for reasons to be bearish and finds a few:

The weight of the indicator evidence continues to lean bullish. There are always indicators that disagree with the weight of the evidence, so it is important that we have an objective model…to help keep us in line with basic conditions, like a bullish tape and a friendly Fed.

Yet, one never knows for certain in this business, and it may be helpful, for flexibility and an open mind, to know the other side of the debate, should trends change.

Among the evidence that bothers me is [margin debt]. Margin Debt at the end
of September was at record high levels, even above 2000 and 2007. While margin
debt is usually bullish as long as it is rising, we are in a zone that has, on average,
suggested the upside was limited.

Pierpont Securities’ Stephen Stanley ponders the potential impact–or lack thereof–of tomorrow’s GDP release:

The first estimate of GDP always runs the risk of being viewed by market participants as "old news." In the case of tomorrow's Q3 GDP report, the data will almost certainly be viewed that way for two reasons. First, it is quite literally old news, in that the release was delayed by eight days by the federal government shutdown. Second, the specter of the fiscal disruptions in October have created a before shutdown/after shutdown breach in how the economic data are perceived. Any numbers that relate to conditions prior to the shutdown are dated, in that the landscape may (or may not) be considerably different, depending on whether the fiscal travails caused a lasting drag on activity and/or confidence.

Anyone for a new high tomorrow?