Wall Street makes history in breaching 10,000 mark

To muted cheering on the floor of the New York Exchange, the US stock market passed a historic milestone yesterday - and many traders and investors said the rise was set to continue.

The Dow Jones Industrial Average, the most widely-followed measure of US share prices, rose briefly above 10,000 during morning trading in New York, only 15 years after it first reached 1,000. It had taken 77 years to get from 100 to 1,000. It later slipped back to close down 28.3 points on 9,930.47.

After the breathless media anticipation that had accompanied the Dow's rise towards the latest landmark, the breakthrough into five digits came as something of an anti-climax on the trading floor. "It's just a number," said Mr Theodore Weisberg, a white-haired trader who took a moment off to bask in the un-seasonal sunshine bathing the sidewalk outside the NSYE's Manhattan home.

"When I started, I remember the Dow at 580: breaking through 1,000 was a big deal," said Mr Weisberg.

Despite the subdued mood among traders, the event was generally expected to prompt further buying of US shares, particularly from the millions of ordinary Americans whose investments in mutual funds or directly in stocks has accounted for much of the market's rise in the 1990s.

"There is probably enough exuberance and cash to drive another spike (in share prices)," said Mr Bill Meehan, chief market analyst at stockbrokers Cantor Fitzgerald.

Others warned that any euphoria following the Dow's latest milestone might fuel what many observers already fear are unrealistically high share prices. "If anything, it might create a false sense of security, like the tail wagging the dog," said Mr Weisberg.

The stock market's latest rise suggests that many investors have shaken off the concerns of the past 18 months that accompanied Asia's economic crisis, Russia's unexpected financial implosion and Brazil's currency collapse. These events have served, if anything, to boost share prices further, since they have exerted a drag on the US economy's headlong growth and so reduced the threat of higher interest rates.

Meanwhile, at least some on Wall Street were happy to bask in the attention that the soaring stock market has brought - among them Mr Ralph Acampora, chief technical analyst at Prudential Securities and one of the first to predict, in the mid-1990s, that the market could reach 10,000 before the end of the decade.

Proclaiming the rise in share prices since last autumn to signal "a new bull market", Mr Acampora said the US could be at the beginning of a 12-15 year "mega-market", similar to the booms that followed the first and second world wars.

For others, though, the attention that a Dow 10,000 has attracted had already been overdone. The media attention has been "like Monica Lewinsky - maybe now it will go away", said Mr Larry Wachtel at Prudential Securities.

The latest jump in share prices has been aided by an easing of fears that the Federal Reserve would soon be forced to raise interest rates to prevent an overheating of the US economy. Long-term bond yields fell back below 5.5 per cent yesterday, after a bout of concern that a consumer boom was lifting the economic growth rate to an unsustainable level.