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Why the Dow Rose 218 Points Last Week

By Matt Thalman – Mar 1, 2014 at 9:00AM

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A look at what caused the Dow Jones Industrial Average to move.

Every week the Dow Jones Industrial Average (^DJI 1.26%) moves on a number of factors, from earnings releases to housing or jobs reports. Earnings reports are always key to making buy or sell decisions, though investors may also examine data points for clues about what's happening with the economy, which, in turn, can affect the stocks they own.

This past week, the blue-chip index rose 218 points, or 1.35%, and now sits at 16,321. Let's see what caused it to move.

On Monday, Germany released a report saying its economy was strengthening -- and when Europe's economic powerhouse talks, the world listens. European stock markets rose on the news, and so did U.S. stocks. The Dow closed Monday up 103 points, or 0.64%. 

The index fell 27 points, or 0.16%, the next day, after the S&P/Case-Shiller Home Price Index revealed the second straight monthly decline in housing prices. The 20-city index followed up November's 0.1% decline with another 0.1% drop in December. On a year-over-year basis, however, the housing index was still up and looking strong, recording its best year since 2005.

The Commerce Department weighed in on Wednesday with its own housing report. The seasonally adjusted annual rate for January came in at 468,000 new home sales, a 9.6% gain for the month and the highest number in more than five and a half years. The Dow finished the session up 18 points, or 0.12. 

Thursday brought the Labor Department's weekly unemployment report. Applications for benefits increased by 14,000 last week, bringing the total to 348,000. But the four-week rolling average sits at 338,250, which isn't much higher than before the recent recession. The Dow ended Thursday up 74 points, or 0.45%. 

The index gained 49 points, or 0.3%, to close out the week, as investors got a revised GDP figure for the fourth quarter of 2013. It was a downward adjustment, from 3.2% to 2.4%, while analysts were expecting 2.5%. A lot of market-watchers chalked up the stumble to the cold weather and didn't seem affected by the slight miss.  

Matt Thalman and The Motley Fool have no position in any of the stocks mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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