Street curmudgeons will tell you the 11,000 mark doesn't matter, that it's just a number. But after six years without making a dime, as the Dow's long doldrums suggest has been the average investor's experience, hitting a big number like 11,000and holding itmay be more important than many believe. The stock market is as much an emotional barometer as it is a gauge of the economy. Indeed, if stocks were purely rational, the Dow would have set a new record by now. GDP growth is on track, inflation is tame, corporate earnings are good, dividends are up and values have become attractive. Large-cap valuations in particular, says Leon Cooperman, who runs the $4 billion hedge fund Omega Advisers, "are reasonable."
Quibble all you want about things like the deficit and inverted yield curve. In general, the fundamentals look pretty good. Arguably, the only thing missing from this market has been a healthier psychology, wich is understandable, given how long stocks have suffered. But just maybe a round number like Dow 11,000 will finally get investors to think about the upside of stocks again. If so, there are trillions of dollars in money market accounts, trillions more possibly looking to get out of real estate, and another trillion-plus of buying power collecting dust at private equity firmsmuch of which could move into the stock market and help topple the old record sooner rather than later.