The blue chip index’s latest surge has been driven by a stream of evidence signaling that the US economy is on the mend.
The milestone reached Tuesday came after European leaders agreed to give Greece a $170 billion aid package in exchange for sweeping new cuts to the Greek budget.
The deal is designed to give Greece continued access to the international bond market, but there are still big questions about how it will be carried out.
The Dow wobbled Tuesday morning, entering negative territory in early trading before reversing course.
Even after crossing 13,000 the index fell again, and was recently trading up 0.4% or 46.81 points to 12,996.68.
In other trading, the Standard & Poor’s 500 was up five points at 1,366.
But the euro rose slightly at $1.32, which could be seen as a sign of confidence in European markets.
The leading stock market index in Germany was recently down 0.5% after rising 1.5% Monday.
So during this six month period of above average volatility, the stock market produced a net loss of just over 1%.
The Standard & Poor’s 500 index notched its own milestone Tuesday morning by rising above its highest closing point since 2008.
The technology heavy Nasdaq composite rose 0.4%, or 10.40 points to 2,962.18.
The Russell 2000 index of smaller companies was up 0.2% or 1.65 points to 830.33.
The index has climbed more than 35% since early October and is within striking distance of an all time high hit last year.
The European financial situation has bedeviled stock markets for the last two year, as political leaders have struggled to come up with a comprehensive answer to the hobbling levels of debt in Greece and other struggling European economies.
The situation has quieted down in recent months, allowing the stock market’s steady surge upward, and the deal struck early Tuesday appears aimed at ending the crisis once and for all.
But economists and politicians left the meetings with a number of unanswered questions.
The deal still has to be approved by the parliaments of individual European countries.
“Although an agreement has been reached we suspect this is not the last we’ll hear of Greece over the days, weeks, months and years,” Deutsche Bank economist Jim Reid wrote in a note to clients.
The stock market’s recent climb has caught many investors off guard, especially since many of last year’s problems are lingering.
In fact, over the last two decades the stock market has done better when the VIX is below it long term median of around 20 than when it is above it.
In addition to the continuing concerns about Europe’s debt crisis, there is fear that corporate earnings and the overall US economy may still weaken.
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Ciaran Song is a business journalist based in Seoul, Korea. Ciaran has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Ciaran spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
