Growth has been so strong that both the Dow Jones and S&P 500 closed with record highs on Thursday evening. In the first quarter of 2018, the stock market was a risky place to invest. Volatility was high due to several conditions.
Trade tensions didn’t help, although investors have since realized that an ongoing tariff battle does not necessarily have an immediate effect on the market. Confidence has grown throughout this year and we are now looking at three months of stable growth across most sectors.
What Has Driven the Dow Jones?
The Dow Jones Industrial Average closed at 26,657 points, which beat the previous record set in January of this year. By percentage, the index was up 0.95% at the end of the day.
Much of the increase in value has been driven by traditional growth stocks. The difference this year is that they have grown far beyond expectations.
Since March when the market started to exit its volatile period, Apple has contributed 378 points to the Dow Jones. United Health contributed 372, Boeing is slightly behind with 316 points, and Visa Inc. is up 221 points. Home Depot, an unexpected high performer, is up 271 points since March.
The record high has also been made possible by the fact that losing stocks have only slipped slightly in comparison to the highest performers. Goldman Sachs Group Inc. is the worst loser of the period since March. Its total decline over the period is only -55 points. Intel Corp., the second most significant loser on the index is only down -14 points, and it is starting to claw back the losses from recent weeks.
Investors can have a lot of confidence in large cap stocks on this index, and a diversified portfolio would offset any losses from underperformers in most scenarios.
S&P 500 Also Hits a High
The Dow Jones is joined by the S&P 500, which also hit a record high at close on Thursday. At 2,930 points, this was the most valuable rating in the history of the index. The S&P 500 tracks the largest capitalization growth stocks, so the performance is not all too surprising when considering how much the largest stocks have grown in value.
This positive news comes as a kind of defiant win in the face of recent trade tensions. While investors are braced for any long-term impact of tariffs between the Unite States and China, the bull market is still prevailing when looking at all the indexes as a whole.
For long term investors looking for dividends and high value stocks they can carry through to retirement, the current market is better than it ever has been.
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