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The Stock Market (Dow Jones Industrial Average) in 2009

December 31, 2009 Business, Economy, Equity Trading No Comments

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The U.S. stock market is poised to end 2009 with a comeback of historic proportions, with the Dow Jones Industrial Average up 61% from its March nadir and 20% for the year.

But the history of such rebounds suggests the biggest gains may already be over, making it hard to expect a blockbuster 2010….

… Early in the rally, the gains were fueled by the realization that the financial system and the economy would escape total meltdown. But then signs of an improving economy and company earnings that consistently bettered expectations took hold, helping drive market gains.

The biggest worry for many investors is whether the rise in stocks reflects an overly optimistic view of what lies ahead for the economy.

For the stock rally to endure, investors say, the U.S. economy must avoid slipping back into recession — a “double-dip” scenario — and start adding jobs. Companies also will need to deliver earnings fueled by better sales, rather than by the aggressive cost-cutting that many undertook in 2009….

You can read the whole thing through the link below.

Last year around this time, I had a conversation with a Private Equity Director over dinner about the stock market. He was convinced that we would end this year lower. I was a bit more optimistic and convinced my argument was better than his. It looks like I win. =P

Link: 2009: Banner Year for Stocks, Joanne Slater, Wall Street Journal, 12/31/09.

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