While the new record for the Dow Industrials means they have recovered ecaptured their losses, it also means they have made virtually no progress in more than six years. Of the 30 stocks in the Dow average, only 10 have surpassed their levels of January 2000. Microsoft is down 46% since Jan. 14, 2000. Intel is off 60%. General Motors is down 59%. The biggest gainers are Altria, maker of Marlboro cigarettes and Kraft cheese, up 214%; equipment-maker Caterpillar, 151% higher; industrial conglomerate United Technologies, with a 103% gain; and Boeing, up 86%.

The 30- blue chip Dow Industrials Average hit a new record on Tuesday, boosted by hopes that falling oil prices will support consumers and the housing market. The benchmark rose 56.99 points to pass the record close of 11722.98 that was set on  Jan. 14, 2000, to finish at 11727.34.

From its 2000 high to its 2002 low, the Dow had plunged 37.85%; the tech heavy Nasdaq Composite Index, plunged 77.93%.

Recent gains have been fuelled by hopes that the Federal Reserve may begin to cut short-term interest rates sometime next year, to give the economy a boost. The prospect of lower interest rates has been pushing down the yields on Treasury bonds since late June, helping to also push down mortgage rates. Coupled with falling oil prices, consumers have reason to be more optimistic.

The Nasdaq Composite Index has doubled since its own 2002 low, and the Standard & Poor's 500-stock index is up 72%. However, as Nasdaq plunged so far during the bear market, it would have to more than double again to return to its March 2000 record of 5048.62. It finished on Tuesday at 2243.65.

Hedge Funds

The Wall Street Journal says that as the Dow Jones Industrial Average climbs to record heights, many hedge funds are stumbling and more than ever are closing shop.

The latest to falter: Vega Asset Management. One of the world's largest hedge funds a few years ago, Vega has suffered losses from a bad bet against U.S. bonds, and is now down roughly 75% from its peak two years ago to about $3 billion in assets. The firm says it has no plans to cease operations.

New figures show that more than 1,000 hedge funds have shut in the past two years, as competition has squeezed profits. The Journal says that even some veteran managers, in a bid to boost returns, have made concentrated bets that have backfired. All this has set up the $1.23 trillion industry for its first meaningful consolidation, Wall Street executives say.

In just the past few weeks, Amaranth Advisors LLC announced plans sell to its investments after losing $6 billion, mostly in the energy markets, heightening the prospects it will close its doors. Narragansett Management LP in New York recently said it will return $800 million to investors. And two European-based hedge funds recently have told investors they are shutting down one or all of their funds.

Vega, which has offices in Spain, London and New York, managed about $12 billion a couple of years back and about $6 billion as recently as January. It once was seen as a winner in the growing popularity of hedge funds among large institutions.

Vega placed a big bet that the price of US, European and Japanese bonds would fall. However, the bond market has rallied sharply in recent weeks and Vega's largest fund, Vega Select Opportunities fund, which manages about $1.4 billion lost about 11.5% of its value in September -- much of it coming in the last week of the month -- and is down about 17.5% so far this year.

The Journal says that since January 2005, a total of 2,622 new hedge funds have been launched, according to Chicago-based Hedge Fund Research Inc., which compiles data on the industry. But 1,071 funds closed during that time. In 2005 alone, 848 funds closed, representing 11.4% of the funds in operation at the start of that year. This is more than double the closure rate of 2004, when 296 funds shut, or 4.7% of the funds in business at the start of that year.

Hedge funds have returned an average of 6.9% this year through the end of August, according to Hedge Fund Research's composite index. That compares with full-year returns ranging from 31.2% in 1999 to minus 1.45% in 2002. In 2004 and 2005, Hedge Fund Research's composite index returned slightly over 9% each year.