Dow ends above 11,000, but risks linger

09:22, April 13, 2010      

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Although the Dow Jones industrial average closed above the psychologically comforting 11,000 points Monday, many market analysts have cautioned that risks persist as an anemic global economic recovery could take a headwind at any time.

A senior Chinese central banker warned Monday that huge uncertainties remain in the major joints of economy, including awkward fiscal crunches in southern European countries and credit-groomed equity bubbles in China.

Zhu Min, a vice-governor of China's central bank, the People's Bank of China, was quoted by a local business newspaper as saying that he is fairly worried about the health of some major economies, which look like physically boosted by an unprecedented scope of government stimulus and bank loans, but face genuine difficulty in generating jobs and private-sector investments.

Zhu cautioned that world economies could cascade into difficulty in the second half of the year.

Both the United States and China economies are now buoyed by a very low level of interest rates, and a record amount of government stimulus plan. Analysts say the low rates policy, in effect ever since late 2008, has purposely boosted prices of the stocks.

In China, a crest of credit has led to a skyrocketing price of housings and caused a rise in inflationary pressure.

The Dow Jones industrial average closed above 11,000 for the first time in 18 months on investors' rising hopes about the U.S. economy.

The Dow edged up nearly 9 points Monday to almost 11,006. The Standard & Poor's 500 index came within a point of hitting its own milestone of 1,200 during trading but closed just short of that mark.

Analysts said the Dow's move above 11,000 could provide a psychological boost and perhaps draw more investors to the market.

"There is a huge stockpile of cash on the sidelines earning virtually nothing," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Maybe this can help shake a few people into the market."
Wall Street has been rising this year on growing expectations that the economy will shake off job market weakness and housing problems.

On Monday, a loan agreement for fiscally difficult Greece allowed U.S. investors to focus on booming domestic economic and corporate news. European Union leaders agreed over the weekend to make loans available to Greece to help the country lower its public debt burden.

People's Daily Online



(Editor:梁军)

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