Every week the Dow Jones Industrial Average (^DJI 0.69%) 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 rose 89 points, or 0.54% and now sits at 16,412.71. So what caused the move?
On Monday the Dow rose an impressive 134 points after Federal Reserve Chairwoman Janet Yellen said the economy still needs extraordinary support and will need it for some time to come. That single comment was enough to give investors the confidence to push stocks higher on the idea that the central bank would continue to stimulate the markets for the foreseeable future.
Tuesday, the blue-chip index rose 75 points despite a weaker-than-expected Institute for Supply Management report. The manufacturing purchasing managers' index reading came in at a 53.7 for March, just below the 54 economists were expecting. While this does indicate the economy is slightly weaker than most expected, the reassuring comments from Yellen on Monday continued the Dow's rally into day two.
On Wednesday investors got the first of three jobs reports being released during the week. Payroll processing company ADP reported 191,000 new jobs had been created during March, and although that figure was below the 193,000 economists were looking for, it wasn't big enough of a miss to dramatically affect the markets. The Dow rose 40 points on hump day.
The second jobs report came on Thursday, as the Labor Department released the weekly jobless claims figure. While economists were expecting 317,000 claims during the previous week, 326,000 claims were reported. That figure was substantially higher than the previous reading of 311,000, which was revised lower to 310,000 and was enough to move the four-week moving average from 317,750 to 319,500. The Dow lost 0.45 points on Thursday.
And finally on Friday, the Labor Department reported that 192,000 new nonfarm jobs were created in March. This figure again was lower than what economists were expecting, but by only 8,000. Regardless, the markets didn't take the news well, and after hitting a new all-time high earlier in the week, it seemed investors needed a reason to sell the market off -- and a slight jobs-number miss fit the bill. The Dow lost 159 points on Friday, but the real loser was the Nasdaq, which fell 2.6% as the index's recent highfliers took a dive.
