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Midday Market Update

Dow 20,000: So Close Yet So Far

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U.S. Markets
U.S. indexes were faltering after opening the day in the green. After rising a bit, Nasdaq’s momentum faded, and it pared all its gains. It was down about 0.46%. The 20,000-point hurdle is proving increasingly difficult for Dow Industrials. It was down 0.11%. The Standard & Poor’s 500 Index was down about 0.33% at 2,261.37.

U.S. home prices are back to the pre-crash levels. The S&P/Case-Shiller U.S. National Home Price Index was up 5.6% in October from the previous year. Seattle, Denver, and Portland were the biggest gainers, with Seattle’s home prices soaring 11% year over year. Mortgage prices are expected to rise more as home prices continue to outpace the wage and personal income growth rate. This seems to be in line with the high levels of consumer confidence reported yesterday. Consumer confidence goes up as asset prices owned by households go up. As households feel wealthier, they spend more and save less. This is at times calledthe wealth effect.

Manjul Bhusal Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.