NEW YORK (AP) — The Dow Jones industrial average, an index of 30 U.S. stocks and a gauge of financial markets, closed at a record high of 14,253 on Tuesday. The Dow has more than doubled since hitting a 12-year low in March 2009.
How have stocks managed to recover and where is the market is headed?
Q: STOCKS ARE AT A RECORD? HOW DID THAT HAPPEN?
A: Stocks have been rallying since bottoming out in March 2009 during the Great Recession. Companies slashed costs in the depths of the recession and that helped earnings increase when the economy began to recover. More than $2 trillion of stimulus from the Federal Reserve, has also underpinned the rally by keeping long-term interest rates low. As well as helping the housing market recover, low interest rates encourage companies to borrow and invest.
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