http://americasmarkets.usatoday.com/2014/11/21/dow-flirts-with-18000-for-first-time/
The
Dow got a boost today from a surprise interest rate cut from China’s
central bank and fresh signs from European Central Bank chief Mario
Draghi that more stimulus is in the pipeline for the ailing eurozone
economy. The 30-stock Dow notched its 27th record close of 2014 on
Thursday, closing at 17,190.27.
http://en.wikipedia.org/wiki/Interest_rate
The central banks
of countries generally tend to reduce interest rates when they wish to
increase investment and consumption in the country's economy. However, a
low interest rate as a macro-economic policy can be risky and may lead to the creation of an economic bubble, in which large amounts of investments are poured into the real-estate market and stock market. In developed economies, interest-rate adjustments are thus made to keep inflation within a target range for the health of economic activities or cap the interest rate concurrently with economic growth to safeguard economic momentum.[2][3][4][5][6]
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