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Why the Dow Jumped This Week

By Anand Chokkavelu, CFA – Updated Apr 6, 2017 at 4:10PM

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Breaking down the Dow.

The Dow Jones Industrial Average (INDEX: ^DJI) rose 1.4% (from 12,019.42 to 12,184.26) this week.

The Dow measures the movements of just 30 leading American companies, but the rest of the market reported a similar story; the S&P 500 (INDEX: ^GSPC), Nasdaq (INDEX: ^IXIC), and the Russell 2000 were all up as well.

It's difficult (and usually wrong) to give credit or blame for the complex movements of the market to just one event, but if there's one reason the Dow was up this week, it's some optimism about the European Union's ability to co-operate for the common inter-country good. As the Washington Post reported: "A landmark summit of the 27-nation European Union ended here Friday with both a pledge and wedge: A pledge among nations to work toward a new treaty binding them more closely together in a pact to save the euro, and a wedge between the continent and Britain, which opted to sit it out."

Well, it's a start at least. There will certainly be many more twists and turns to this story.

A more granular view
For the individual stock investors among us, we can also look at the big moves among the stocks that make up the Dow.

The three biggest winners this week:

Company

Stock Price Change

General Electric (NYSE: GE) 4.7%
Pfizer (NYSE: PFE) 3.4%
Travelers 3.3%

Source: S&P Capital IQ

GE jumped up Friday as it increased its quarterly dividend from $0.15 to $0.17. Pfizer is up despite having to now (as of Nov. 30) compete with generics for its huge cholesterol drug, Lipitor. Meanwhile, Travelers is using its cash to buy back stock at a greater-than-expected clip.

The three biggest losers:

Company

Stock Price Change

DuPont (NYSE: DD) (4.2%)
Alcoa (2.7%)
Caterpillar (NYSE: CAT) (0.3%)

Source: S&P Capital IQ

DuPont led the losers because it cut its earnings guidance for 2011. Meanwhile, there wasn't as obvious a reason for Alcoa's drop (besides normal commodities volatility), and Caterpillar is basically flat.

Remember that we're just looking at weekly movements here. It's fun to check in on the news, but at the Motley Fool, we recommend investing for the long term. These weekly price movements are just small blips in the bigger picture.

For a stock that the Motley Fool's chief investment officer believes has a long, prosperous future ahead of it, check out our brand-new free report: "The Motley Fool's Top Stock for 2012." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this legendary company.

Anand Chokkavelu owns shares of Pfizer. Motley Fool newsletter services have recommended buying shares of Pfizer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insightsmakes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$29,590.41 (-1.62%) $-486.27
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$10,867.93 (-1.80%) $-198.88
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,693.23 (-1.72%) $-64.76
General Electric Company Stock Quote
General Electric Company
GE
$64.55 (-1.24%) $0.81
Caterpillar Inc. Stock Quote
Caterpillar Inc.
CAT
$164.24 (-3.70%) $-6.31
Pfizer Inc. Stock Quote
Pfizer Inc.
PFE
$44.08 (-1.10%) $0.49
E. I. du Pont de Nemours and Company Stock Quote
E. I. du Pont de Nemours and Company
DD

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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