Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why the Dow Rose Only 20 Points Last Week

Every week the Dow Jones Industrial Average (DJINDICES: ^DJI  ) moves on a number of factors, whether earnings releases, housing or jobs reports, gross domestic product figures, consumer sentiment indexes, or a change in the trade deficit. While earnings reports are the most important for investors, the numerous economic reports published each week can give an investor insight into the health of the economy, which in turn affects the health of the stocks they own.

This past week the blue-chip index lost 384 points, or 2.33%, and now sits at 16,065. So what caused the move?

On Monday the Dow fell 26 points, following weak economic data for the U.S. and China. The Markit Flash U.S. Manufacturing Purchasing Managers Index came in at a reading of 55.5 for March, while it had been at 56.7 in February and economists were expecting it to hit 56.9 this month. As for China, the HSBC PMI reading fell to 48.1 for March after coming in at 48.5 in February.  

The Dow rose 91 points on Tuesday, after two housing reports and a consumer confidence reading. The Case-Shiller Home Price Index for January indicated that housing prices rose 13.5% in the 10-city index and 13.2% in the 20-city index when compared with January 2013. But when compared with recent months, the 10-city index didn't see prices change while the 20-city reading saw prices slightly fall. The other housing-related reading was the new home sales figures, which came in at a seasonally adjusted 440,000, below economists' predictions of 445,000. Finally, the consumer sentiment reading came from the Conference Board, which reported that consumer confidence rose from a reading of 78.3 in February to an 82.3 in March.  

Wednesday the Dow lost 98 points, after trading up more than 100 points early in the trading session. The only real economic data was the Census Bureau's durable goods report, which showed sale orders growing by 0.2% for the month, below the 0.3% economists were looking for. But that, combined with more drama with Russia and Ukraine, was enough to send stocks lower.  

On Thursday the blue-chip index ended the day down 5 points with very little economic news, other than the weekly jobless claims figure. While economists were expecting 323,000, the actual figure was just 311,000. Furthermore, the four-week moving average, a figure most consider to be a better indicator, fell nearly 10,000 claims to 317,750.

And finally on Friday, the Dow rose 58 points. Part of that increase came after the Commerce Department reported that consumer spending rose 0.3% in February. But because a large portion of those gains came from the health care sector and higher utility spending, some investors cautioned that these figures may decline in the future, as the weather warms up and we feel the full economic impact of the Affordable Health Care Act. 

Check back tomorrow to see what economic reports will move the Dow this coming week.

3 stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2895553, ~/Articles/ArticleHandler.aspx, 9/5/2015 12:23:27 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Matt Thalman

Matt primarily covers the Dow Components, the Major Indexes daily moves, Consumer Goods stocks, and General Investing Topics.

Today's Market

updated 15 hours ago Sponsored by:
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASD 4,683.92 -49.58 -1.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 4:30 PM
^DJI $16102.38 Down -272.38 -1.66%