AILSA CHANG, HOST:
Stocks powered through a historic milestone today. The Dow hit 30,000 for the first time ever. President Trump, who's been mostly staying out of the public eye since the election, appeared briefly at the White House to celebrate.
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PRESIDENT DONALD TRUMP: The stock market's just broken 30,000. Never been broken, that number. That's a sacred number, 30,000. Nobody thought they'd ever see it.
CHANG: A sacred number. In a year when the pandemic has wreaked havoc on the global economy, stocks are actually reaching all-time highs. To find out why, we turn now to NPR's Jim Zarroli.
Hey, Jim.
JIM ZARROLI, BYLINE: Hi, Ailsa.
CHANG: Hi. So, I mean, milestones like this usually get a lot of headlines, right? But how important are they when it comes to the stock market or to the Dow especially?
ZARROLI: Well, you know, the Dow matters simply because it is the world's best-known stock index by far. All over the world, it's really synonymous with the stock market. So when these milestones happen, it can have an effect on public confidence, which is a good thing, especially when you look at just the amazing roller coaster ride we've been on this year.
CHANG: Yeah.
ZARROLI: The Dow was actually not far off of 30,000 in February. Then, of course, came the pandemic. Everything shut down, millions of people thrown out of work. And the Dow actually fell to a little more than 18,500 within, you know, just a few weeks. It was, you know...
CHANG: Yeah.
ZARROLI: It was a wholesale collapse. Everything looked bleak. Now it's made up all those losses and then some.
CHANG: So what's behind these dramatic gains that we're seeing right now?
ZARROLI: Well, one of the things that's happened this week is the president has indicated his team will cooperate with the transition to the Biden administration. There had been a big note of uncertainty about the orderly functioning of government. Now that's been removed. But I think more important than that is we're seeing some real progress in fighting COVID, at least potentially. Drug-makers like Moderna say they've had really good success with vaccines they're developing. And as soon as they said that, you just saw stock prices go through the roof. All these stocks that had been hurt because people were staying home so much, you know, like airlines and cruise ship companies - suddenly they were soaring.
CHANG: Yeah. I mean, that makes sense, but stock prices were climbing even before the vaccine news. So what else could be going on here?
ZARROLI: Well, if you talk to people on Wall Street, they pretty much all point to the same thing. They say Congress and the Fed were really quick to act to keep the economy going. I talked to Michael Arone, who's chief investment strategist at State Street Global Advisors. And he says the government just acted a lot faster this time than it did after the big 2008 financial crisis.
MICHAEL ARONE: This time around, there was a playbook. And we put that playbook on steroids, and it was followed quickly and aggressively. And so I think that that was a big difference-maker this time around.
ZARROLI: Arone says the Fed put together this amazing series of lending programs for businesses and governments, and they did extra benefits for unemployed people. And these things made all the difference in the world. They convinced investors it was safe to go back into the markets.
CHANG: Well, ultimately, though, does the Dow hitting 30,000 tell us anything about how strong the economy is?
ZARROLI: Not really. I mean, as we often say, the stock market is not the economy. You can have the market doing well when the economy is not and vice versa. The fact is, you know, we still have an economy that faces really big challenges. Millions of people are out of work. Thousands of businesses, you know, like restaurants, hotels - they're shutting down. So we - and plus, we're seeing a really big resurgence in coronavirus cases. We're already seeing states like California reinstating lockdown. So, you know, we could be in for a tough couple of months. People who own stocks have a lot of reason to be happy. Everybody else, you know - the future's murky.
CHANG: That is NPR's Jim Zarroli.
Thanks, Jim.
ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.
