Dow can be a saving grace to the US economy

Discussion in 'Trading' started by bapunagar, Oct 4, 2006.

  1. The Dow Jones Industrial Average rose to a record high, as stocks rallied on a sudden fall in the commodity market, the two months decrease in oil price accelerated and improved the outlook for the consumer spending on Tuesday, as oil prices fell sharply, but the broader stock-market remained well below their peaks of the high-technology boom. Oil prices fell below $59 a barrel, the lowest level since February, reducing worries about inflation. Crude oil for November delivery fell 3.9 percent to $58.68 a barrel in New York, the lowest close since Feb. 16. It was the biggest one-day decline since Aug. 17, 2005. Lower energy costs give consumers more money to spend, benefiting retailers.
    With a record several times in recent days, the blue-chip stock index finally broke above the previous high set more than six years ago, Wal-Mart Stores Inc., the world's largest retailer and Boeing Co., the world's second-biggest maker of commercial aircraft; and United Technologies Corp., the maker of Otis elevators and Carrier air conditioners, led the Dow to a close of 11,727.34.
    The Dow climbed 56.99, or 0.5 percent, in exceeding its peak of 11,722.98 on Jan. 14, 2000. Since the last bear market ended four years ago, the Dow has risen 61 percent, the record followed the best third quarter since 1995 for the average, which includes many of the biggest U.S. companies by market value, as the Federal Reserve stopped raising interest rates.
    The Standard & Poor's 500 Index added 2.79, or 0.2%, to 1334.11.
    The NASDAQ Composite Index was up 6.05, or 0.3%, at 2243.65. I feel this is a good sign for the US economy too , as the slowdown seems even far away with such good results in the market .
  2. Breaking 6-1/2 year’s record and 61 percent overall rising is the good sign for the Dow Jones. Decline in the commodity market and rise in technology shares contributed Dow to reach record level high. It seems there is a good market for the technology shares in the near future.

    Patanx done good analysis on the markets.

  3. Net change in the constituent members of the Dow from the January 14, 2000 record close through earlier today...

    Dow Components

    Eastman Kodak -62.22% [No longer in Dow]
    General Motors -60.74%
    Intel Corp -60.18%
    Microsoft Corp -51.27%
    Home Depot Inc -41.21%
    Merck & Co -39.47%
    Intl Paper Co -38.47% [No longer in Dow]
    Du Pont -36.06%
    Honeywell Intl -31.31%
    IBM -31.19%
    Alcoa Inc -30.83%
    General Electric -29.46%
    Coca-Cola Co -26.62%
    Wal-Mart Stores -23.24%
    AT&T Inc -21.05%
    Hewlett-Packard -18.83%
    Disney (Walt) Co -7.43%
    McDonalds Corp -6.35%
    JPMorgan Chase -4.43%
    Dow Jones Indus. Avg -0.12%
    Procter & Gamble 7.72%
    American Express 19.73%
    Citigroup Inc 24.22%
    Johnson&Johnson 38.18%
    3M Co 50.67%
    Exxon Mobil Corp 59.09%
    Boeing Co 80.93%
    United Tech Corp 98.52%
    Caterpillar Inc 153.77%
    Altria Group Inc 220.83%

    SBC Communication [Now part of AT&T]


    What's amazing is that 20 of the 30 Dow Components are off their highs, and that so many of the them are WAY OFF their 2006 highs. Of the 20 Dow components that are below their 2000 peaks, 14 of those 20 off by more than 25%.

    That is the nature of a price weighted index . . .