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 released 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 128 points, or 0.78%, and now sits at 16,449. So what caused the move?
On Monday, news hit that Russia's military had boots on the ground in the Crimea region of Ukraine. The Dow fell 153 points, or 0.94%, on the day as fear swept through the markets. Now that Crimea looks likely to secede from Ukraine and join Russia, the potential for war and an ensuing global economic turmoil looks a lot less likely.
Investors' gut reaction to sell on Monday helped set the stage for a quick turnaround on Tuesday, when Russia pulled back its troops. The Dow rose 227 points, or 1.4%, on the day. We see one-day panic sessions like this almost every month. Investors are better off just ignoring them and staying focused on the long term.
Wednesday started off a three-day streak of job reports. ADP's figure of 139,000 new jobs was lower than the 155,000 economists were expecting, and its January figure was revised down from 175,000 to just 127,000. The Dow didn't take the news well and lost 35 points, or 0.22%, during the day.
The Labor Department's weekly jobless claims came out on Thursday, showing a decline of 26,000 to 323,000. That figure helped pull the four-week moving average down by 2,000 claims to 336,500. While the weekly figures can jump dramatically, the average is a better number to concentrate on, and that's slowly been inching down toward the 300,000 level, which economists consider a healthy mark for the U.S. economy. The Dow rose 61 points, or 0.37%, on Thursday.
Finally, the Labor Department was back on Friday to report a rise in non-farm payrolls of 175,000 in February, beating expectations of 150,000. The news helped push the Dow higher on the day by 30 points, or 0.2%. The unemployment rate did rise from 6.6% to 6.7% in February, but only because of a higher workforce participation rate. Having more people on payrolls means more potential money to stimulate the economy.