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Why the Dow Rose Only 20 Points Last Week

By Matt Thalman – Mar 29, 2014 at 9:00AM

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

Every week the Dow Jones Industrial Average (^DJI 0.64%) 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.

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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