Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The Dow Jones Industrial Average (DJINDICES:^DJI) broke new ground today, hitting 16,000 for the first time ever. The Dow is being led up by Boeing (NYSE:BA) and Goldman Sachs (NYSE:GS) which are both up on the prospect of new business deals. As of 1:40 p.m. EST the Dow was up 48 points to 16,009. The S&P 500 (SNPINDEX:^GSPC) was at 1,799, after earlier hitting a new high of 1,802.
By themselves, both new highs are meaningless as the difference between Friday's prices and today's prices are less than 0.25%.
While the difference between 15,999 and 16,000 is small, psychologically changes in handles, or the first whole number, can have an effect on people. It's the same way that an item priced at $0.99 is four times more likely to be purchased than an item that costs $1. That said, small changes in the market level should not change your investment thinking. If it does, you are doing it wrong.
Boeing is up 1.7% to $138.45 after the company made news over the weekend at the Dubai Airshow. Boeing launched its new 777X jetliner, and four airlines have already ordered 259 of the planes. While the commitments were made this weekend, production is not expected to start for three years and first deliveries are not expected until 2020.
Financials are up, with Goldman Sachs the big mover. JPMorgan Chase (NYSE:JPM) has risen more than Goldman, up 1.8%, yet its smaller stock price means its $1.01 gain moves the Dow three times less than Goldman's $2.99 gain. Financials continue their rise with the market and with the Fed's continued zero interest rate policy and large-scale asset purchases.
Goldman Sachs is up today on the rumor that the company is in talks to sell its commodity warehousing business, called Metro International Trade Services. Banks are getting rid of their warehouse businesses in the face of major criticism over how the companies operate those assets, including the potential of exploiting them to manipulate markets to create false scarcity. After pressure built, Goldman announced it would take measures, particularly at its aluminum warehouses, to shorten wait times for delivery.