Dow Surges 170 Points to Touch 16,000

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

All 30 stocks that make up the Dow Jones Industrial Average (DJINDICES: ^DJI  ) are up after multiple positive reports on the housing market and better-than-expected consumer confidence numbers. As of 1:30 p.m. EST, the Dow was up 173 points to 15,995 after hitting 16,000 around 1 p.m. The S&P 500 (SNPINDEX: ^GSPC  ) was up 18 points to 1,803.

Here are figures from U.S. economic releases today.





Nonfarm payrolls




Unemployment rate




Core Personal Consumption Expenditures Inflation




Univ. of Michigan Consumer Sentiment Index




The two to pay attention are the jobs report and Core PCE inflation. Nonfarm payrolls continued their steady addition of jobs in November. October's jobs growth was also only slightly revised downward from 204,000 jobs added to 200,000. The market had sold off the past few days as investors' feared the November jobs report would come in far higher than expectations after ADP's jobs report did so on Wednesday. This report of steadily increasing but not soaring jobs growth lowers the chance the Federal Reserve will move more quickly to taper its asset purchases.

US Change in Nonfarm Payrolls Chart

US Change in Nonfarm Payrolls data by YCharts.

The other metric to take note of is core PCE inflation, the Fed's favored measure of inflation. Core means inflation excluding energy and food prices which tend to be volatile. Core PCE inflation remains low at 1.1% over the past 12 months, well below the Fed's target of 2%-2.5%. Regular PCE inflation is even lower at 0.7% as a 5% year-over-year drop in energy prices is pulling overall goods prices down. Low inflation and perhaps threats of deflation put the Fed in a tough spot. The central bank is doing everything it can to create inflation, but its efforts are not working.

Today's Dow leader
Today's Dow leader is Intel (NASDAQ: INTC  ) up 3.1% ($0.74) to $25. Citigroup upgraded Intel from neutral to buy on the belief that corporate PC demand has hit a floor where it will stabilize. However, with the stock's low price Intel is not having much effect on the Dow.

The biggest mover of the Dow today is Boeing (NYSE: BA  ) up 1.91% ($2.54) to $135.29. The Dow is structured as a price-weighted index so stocks with larger prices move the average proportionally more than those with smaller prices. Boeing is having three times the effect as Intel today even though the chip maker is worth $25 billion more than aerospace giant. It's for this reason and more that I recommend people stop following the Dow and follow the S&P 500 instead. Boeing is up today as states are beginning to offer it billions in incentives to produce the 777X airliner within their borders. This comes after a machinists' union in the State of Washington rejected its proposed labor contract. Boeing has struggled with its unions for some time and has been trying to move to less unionized states.

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  • Report this Comment On December 06, 2013, at 1:48 PM, hank1800 wrote:

    Scared as Hell, there is no way individual investors are pumping in this much money into stocks. Don't get hooked or you will end up in the frying pan.

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