Business Notes

It could be on a brass plaque near the trading floor: on Wednesday, April 17, the Dow Jones industrial average closed above 3000 for the first time in history. But what does the long-anticipated bench mark really mean? Statistically, the Dow's performance was a thing of wonder. The index first closed at more than 1000 on Nov. 14, 1972, took more than 14 years to close above 2000, then raced to last week's record-breaking 3004.46 close in little more than four years, barely missing a beat even during the crippling crash in October 1987. The milestone demonstrates that despite grim indicators like last month's 6.8% unemployment rate, investors are already anticipating a rebound from the recession.

Yet for all the hoopla, many Wall Streeters don't much care about the Dow, based on a mere 30 blue-chip stocks. More broadly based market measures such as the Standard & Poor's 500 and the Nasdaq composite index have already hit record highs. The breaching of the 3000 barrier may have more psychological than economic significance. "The Dow is purely the public's index. No money manager whom I know pegs his or her results to the Dow Jones," says Wharton School finance professor Jeremy Siegel. When adjusted for inflation, even the Dow has seen more spectacular days. A Feb. 9, 1966, peak of 995.15 remains its highest real value ever: in today's dollars, 4230.