Dow lifts Bay Staters’ hopes

Wall Street cheered as the Dow Jones industrial average soared to a record high yesterday, and Bay State residents and economic experts are hopeful the long-awaited recovery finally has taken hold.

"What we're seeing is a continuation of good news and the more we look around, the more green shoots we're seeing," Christine Armstrong, senior vice president at Morgan Stanley, told the Herald. "When we see this happen, it's bullish for the economy and bullish for the market longer-term."

Bay State residents saw positive signs in the record Dow, which rose 125.95 points to finish at 14,253.77, smashing its highest previous close of 14,164.53 on Oct. 9, 2007.

"If you look at a stellar day, it's a good sign, but the real sign will be when the movers and shakers start hiring," Charlie Duquette of Stoughton said yesterday at South Station. "The market usually precedes reality. In the spring, it's going to thaw, and I think you're going to see a hiring frenzy."

Liz Isaac of North Attleboro said the Dow's performance shows that the federal government sequester "isn't going to cause immediate apocalypse."

"I'm in the middle of a job search, and I see lots of openings and hear lots of positive talk," she said.

But Armstrong warned that the Dow would most likely pull back over the next few days.

"We still have problems — look at how many Americans are still out of work and losing homes," she said. "It's not a party for everybody. It's a party for a lot of people and they're hopefully pulling the rest with them."

Robert Nakosteen, a professor of economics at the University of Massachusetts Amherst's Isenberg School of Management, called the Dow's performance the culmination of a trend that has been going on ever since interest rates were pushed to near zero by the Federal Reserve.

"People who have extra money and want some return invest in stocks," he said.

Although unemployment is still high, businesses have "tremendous" profits, making the stock market very attractive, he added.

"The sequester aside, the economy's really starting to firm up," Nakosteen said. "By no means is it in great shape, but the fact that the stock market is doing well reflects that there's more optimism."

Andre Mayer, senior vice president for research at Associated Industries of Massachusetts, said "the chances of a meltdown seem to be less."

"The economy, though growing very slowly, is much more stable than it was," he said.

All eyes will be on Wall Street today to see whether the Dow's index of 30 blue-chip stocks can hold its record gains — and whether the economy as a whole gets a lift.

"It seems to me (the economy) is doing better," said Carolyn Hoffman of Greenfield. "I have more faith it's headed in the right direction."

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