Today, the S&P 500 rose to 1,211, within 100 points of its pre-crash healthy level of 1,300. The Dow cleared 11,123, less than 900 from its healthy level of 12,000. And the NASDAQ, at 2,505, is already above 2,500, its healthy level. The NASDAQ is back, and the S&P 500 and Dow aren’t far behind. As a consequence, I’ve changed my FOX INDEX back to its original, simple form. It only shows the points by which the S&P 500, the Dow, and NASDAQ remain below their combined “healthy” total of 15,800 (1300 S&P 500+12,000 Dow +2,500 NASDAQ) [see chart].
While Wall Street seems nearly recovered, the AP’s economy survey documents continuing problems with the larger economy. The survey believes:
➢ The unemployment rate will stay stubbornly high the next two years. It will inch down to 9.3% by the end of this year and to 8.4% by the end of 2011 (it has been 9.7% since January). When the recession started in December 2007, unemployment was 5%.
➢ Home prices will remain almost flat for the next two years, even after plunging an average 30% nationally since their 2006 peak. The survey forecasts no rise this year and a 2.3% gain next year.