New Record Value of Dow Jones

The value of the New York Dow Jones index reached a record value on Monday as investors were inclined to believe that the credit crisis was over after three global banks reported their losses due to the crisis.

The Dow thus reached 14,088 points on the first day of the fourth quarter, strengthening by 1.4 percent. This is its 33rd record value in 2007 and the 55th since the market rally began a year ago. During trading, it also touched 14,115.51 points, the highest level ever recorded. The S&P index strengthened by 1.3 percent, to 1,547 points. At the same time, the technology Nasdaq gained 1.5 percent in value, closing trading at 2,741 points, the highest level since February 2001, thanks to the rise in stock prices of technology leaders such as Apple and Intel. American Citigroup reported a 60 percent lower quarterly profit, but investors were comforted by the CEO of the largest global bank, Charles Prince, stating that a return to a normal business environment is expected in the fourth quarter.

The bank’s stock strengthened by 2.3 percent. Analysts point out that Citigroup’s business report, which coincided with similar reports from Swiss banking giants UBS and Credit Suisse for the third quarter, suggests that the losses of these banks due to the crisis in the U.S. subprime mortgage market and other risky loans will not have a lasting impact on the financial sector. "What convinced me that companies will perform well in the face of the credit crisis is Citigroup’s very aggressive stance in reassessing the true value of its portfolio. I believe that other financial institutions will act in the same way," stated Ernie Ankrim, an investment strategist at Russell Investment Group. European stock exchanges also saw a rise in stock prices, with the London FTSE index strengthening by 0.6 percent, to 6,506 points – the highest level since July 23. The Frankfurt DAX gained 0.8 percent in value, closing trading at 7,922 points.