The Dow's up but trades are scarce, worrying bulls

Think Dow 11,000 is a big deal? Think again.

The Dow Jones industrial average briefly hit the milestone Friday for the first time in 18 months before closing at 10,997.

But Wall Street analysts who study key stock index levels say all the attention paid to 11,000 is more like a big distraction. They worry that investors are ignoring another number at their peril: The surprisingly low volume of trading. As stocks have risen over the past year, the volume reflects the vulnerability of a rally riding on the shoulders of relatively few participants.

And that's given pause even to the bulls.

"It worries a lot of us," says Wellington Shields' Frank Gretz, a technical analyst who specializes in pinpointing market levels at which stocks might suddenly rise or fall. He wonders whether the volume signals that the rally could soon peter out, like the big surges that preceded steep declines in the 1930s in the U.S. and in Japan more recently. (more)