Dec. 19 (UPI) — The Dow Jones Industrial Average increased by 5,000 points this year for the first time in its 121-year history.
A 140-point rally Monday pushed this year’s average past the 5,000-point milestone, CNBC reported, making 2017 the best year on record for the Dow.
The Dow is much bigger now than in years past, which is one reason for the higher point totals. But Wall Street is also more optimistic these days, in part because of the Republican tax plan, which will further boost corporate earnings by slashing the corporate tax from 35 percent to 21 percent, USA Today reported.
“Today is probably the continuation of some optimism on tax reform,” said Bill Stone, chief investment strategist at PNC Asset Management Group. He added that Wall Street is also encouraged by the tax plan’s promise to allow companies to write off capital expenditures.
But even before the tax plan gained steam in the Republican-controlled Senate, the Dow was having a record year. In addition to hitting 5,000 points, it made 70 record closes, increased by about 25.2 percent overall with increases in each of the last 13 months.
Richard Turnill, BlackRock’s global chief investment strategist, told MarketWatch: “2017 was a near-perfect year for risk assets.”
But analysts don’t expect the pace to continue in 2018.
CNBC said analysts expect a more modest 5 percent increase for the S&P next year.
And Stone told USA Today that sell-offs could be coming soon.
“It is going to get to a point where it can’t get any better anymore,” he said. “In the market it’s always brightest before it gets dark.”
