Economic optimism climbs as Dow Jones hits all-time high

9:16 PM, Mar 5, 2013   |    comments
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MINNEAPOLIS - The bells were ringing and the bulls were charging on Wall Street. The Dow Jones Industrial average hit an all-time high of 14,253.77 at the close of trading on Tuesday.

The trading floor at Piper Jaffray in Minneapolis hummed along happily on Tuesday as predictions by Senior Research Analyst Craig Johnson were validated by the surging market. Last August, Johnson had predicted a bull market of as high as 15,500 by now.

"Almost there, maybe a little late," commented Johnson. "A week or so late, but then looking out for 1700 for the latter part of this year and then 2,000 on the S&P (Standard and Poors) 500 by the end of 2014."

Moreover, Johnson believes this market is no fluke.

"I think this could be proved to be a generational opportunity to be buying stocks," said Johnson. "We have seen a lot of money moved into fixed income over the last 12 years, while we have been in this secular bear market, but now that we are starting to move out of this secular bear market and the economy's improving and housing is coming back and the auto businesses are starting to show nice improvements in terms of auto numbers. We think that we are going to start to see a secular shift happen -- money coming out of fixed income, coming back into equities."

David Schwandt, PlanViser Financial, of Golden Valley, believes in the bull market as well.

"There has been lots of money sitting on the sidelines waiting for an opportunity to invest, making almost nothing in sort of 'safe harbor' investment," said Schwandt.

Can the market maintain the high levels? Schwandt is more cautious.

"That is the magic question and if you look back on decades in investment history, I mean going way back to 1926, what you find is small company and large company stocks are constantly, the trajectory is perpetually up, with momentary downturns," said Schwandt.

Schwandt noted that 401Ks, which had been stagnant, are rising again.

"We have seen great recovery in these," he said.

Minnesota is home to about 150 companies including 19 on the Fortune 500, Johnson said. Minnesota firms are participating in the stock rebound.

"In fact, almost half of the 34 largest companies in Minnesota are at or near all time new highs," said Johnson. "We are starting to see the industrial companies perform very well, companies such as Stratasys, Toro and Delux, all doing very well."

Schwandt added United Health Care to that mix.

"They may be in a really good position, given where health care in this country is going," he added.

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