5 Top-Ranked Stocks Crushing The Dow In 2016

The Dow ended Tuesday roughly 25 points shy of the psychological level of 20,000. The blue-chip index has surged upward in the weeks following the declaration of the presidential election results. Driving these gains have been specific components, particularly financial stocks, such as The Goldman Sachs Group Inc. (GS - Free Report) which stand to gain from the new administration’s financial policy proposals.

The index is now tantalizingly poised to create a new milestone. However, the absence of any major catalysts means that it remains unclear whether this will at all be achieved. This gives the bears, who are in a minority, some cause for hope. But most market watchers are convinced that the Dow will soon break the 20,000 barrier.

Fastest 1000-point Gain in Sight

The Dow has now registered six successive weekly gains. On Tuesday, it gained 0.5%, to close at 19,974.62. The index also hit an intraday record of 19,987.63, leaving it less than 13 points or a mere 0.1% shy of 20,000. Outsized gains since election results were announced have driven the index higher. This has been primarily due to the impetus received from certain components such as Goldman Sachs and Exxon Mobil Corp (XOM - Free Report) .

If the Dow indeed manages to touch 20,000 this week, it will be the fastest 1,000 point gain for the index ever. To date, the fastest such gain achieved by the index was in 1999 when it moved from 10,000 to 11,000 over 24 trading sessions. The benchmark managed to break above 19,000 for the first time on Nov 22 and Friday will be the 22nd trading day since it achieved this landmark. 

Is 20,000 Really Significant?

 A section of market watchers have questioned the overwhelming importance being accorded to the 20,000 mark, deeming this as unwarranted. These observers argue that the percentage gain as a result of a potential increase from 19,000 to 20,000 is only 5.3% for the Dow. Such gains have diminished over time and look relatively insignificant when compared to the 100% gain which an increase from the 1,000 to the 2,000 mark represented.

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