It's official: With today's surge, the Dow Jones Industrial Average (DJINDICES:^DJI) has hit a new all-time high. While it's still below earlier levels when adjusted for inflation, the Dow -- which is up 140 points, or 1%, as of 2:15 p.m. EST -- has surpassed the previous closing high set on Oct. 9, 2007. Nearly all of the Dow's members are in the green for the day, and with stocks cheering on the market momentum, investors are enjoying the bull run.
Don't get caught up in the hype
Does the Dow's new mark mean the economy is in the clear? Not quite. While European stocks rallied to multiyear highs today, the continent still faces severe pressure from its ongoing economic crisis. Europe's unemployment levels hit new all-time highs in January; the jobless rate in the 17-nation eurozone is 11.9%.
Meanwhile, China is still levying pressure on the U.S. and other advanced economies: While the second-largest economy pledged more government spending today to boost its economic output, the Chinese government's attempts to curb spiraling home prices have some on Wall Street fearing an infrastructure slowdown. That wouldn't bode well for U.S. companies, particularly those in the industrial sector.
There's still plenty to worry about in the economy, but stocks are looking past all that today. Financial stocks are on a roll, with shares in Bank of America (NYSE:BAC) and JPMorgan making respective gains of 1.8% and 1.2%. Last year's strong bank earnings have many analysts excited about the momentum behind this sector -- particularly as B of A led all Dow stocks by doubling in 2012. Although government budget cuts, along with Europe's woes, have some in the financial sector concerned, many more on Wall Street see more gains to come.
Disney (NYSE:DIS) is also having a good day, with shares up 1% despite reports saying rival News Corp (NASDAQ:FOX) is planning to release a competitor to Disney's ESPN sports network via its Fox Entertainment subsidiary. While it's reasonable that Fox should want to challenge Disney's sports dominance, ESPN's clear-cut advantage in the industry won't be taken down easily -- and I would expect Disney to continue to reap significant revenue from its sports affiliate despite the competition. Still, investors may want to keep an eye on just how News Corp and Fox plan to slow down ESPN's juggernaut.
Finally, Pfizer (NYSE:PFE) is up 1.6% today in response to the U.S. Patent and Trade Office's reissuance of a patent for a key ingredient in anti-inflammatory drug Celebrex. The award will maintain Celebrex's patent exclusivity for another year, pushing its expiration back to 2015. That's great news for Pfizer: While the company's revenue has fallen recently due to the loss of patent exclusivity for blockbuster drug Lipitor, Celebrex is no slouch on the sales front. The longer Pfizer can keep this drug's exclusivity, the more time it'll have to beef up its blockbuster drugs of the future.