The Dow Jones Industrial Average on Monday climbed over 16,000 points for the first time in its history.
The blue-chip stock index reached a new all-time high in the first hour of trading, rising roughly 50 points to the new milestone. The S&P 500 and NASDAQ indices both opened higher, but then dipped into more middling territory.
The markets have been buoyed by the Federal Reserve’s unexpected decision to stick with stimulus policies.
The central bank surprised markets in September by announcing it was continuing with its current pace of “quantitative easing,” despite widespread expectations the Fed was ready to begin slowing its support.
The Fed has been buying $85 billion of bonds each month for over a year. That policy, combined with near-zero interest rates, is aimed at lower borrowing costs and driving the broader economy.
The nomination of Janet Yellen over Lawrence Summers to replace Ben Bernanke at the top of the Fed has also boosted markets. Yellen is seen as more “dovish” a pick than Summers, meaning she would be more inclined to continue stimulating the economy for a longer period.
The climbing market has occurred in spite of the ongoing fiscal drama in Washington. Economists say the spending cuts from sequestration and the 16-day government shutdown have been a drag on growth.