The Dow posted significant gains this week, despite suffering a slump on Monday. Benchmarks ended the first trading day of the week in the red, dragged down by declines in technology stocks. The blue-chip index ended Tuesday’s trading session almost unchanged.
Stocks gained on Wednesday, boosted by gains in technology and financial shares. The blue-chip index gained on Thursday after encouraging retails sales data indicated consumer spending is picking up. The Dow has gained 1.1% during the first four trading days.
Last Week’s Performance
Last Friday, the Dow (DIA) dropped 0.3% after upbeat jobs data raised concerns about rate hike coming as early as this fall. The U.S. economy created a total of 280,000 jobs in May, well above the consensus estimate of 222,000. These were the highest job additions since Dec 2014. This was also significantly higher than April’s job number of 221,000.
The unemployment rate came in at 5.5% in May, up from 5.4% in April. Large inflow of people in the labor force was cited to be reason behind this slight uptick in unemployment rate. The U-6 unemployment rate came in at 10.8% in May, which remained unchanged from April but dropped 12.1% from a year earlier.
For the week, the blue-chip index lost 0.9%. Benchmarks ended a volatile week in the red as a decline in jobless claims and positive nonfarm payroll report raised concerns about rate hike sooner than later. Meanwhile, International Monetary Fund (IMF) urged Fed not to hike rates until next year provided there is a clear indication of a pick-up in wages and inflation rate. IMF also trimmed US’s growth forecast.
Lingering uncertainty over striking a deal between Greece and its creditors also dampened sentiment. Meanwhile, economic reports came in mixed for the week. While reports on construction spending and manufacturing were encouraging, data on consumer spending was disappointing. Additionally, private sector hiring picked up in May and trade deficit narrowed last month. Investors are keeping an eye on economic data for clues on when the Federal Reserve will hike interest rates.
The Dow This Week
Benchmarks ended the first trading day of the week in the red, dragged down by declines in technology stocks. Drop in airline stocks also weighed on the broader markets. Meanwhile, Friday’s upbeat jobs data continued to intensify concerns about rate hike as early as September. The blue-chip index declined 0.5%.
The lack of progress related to Greece’s debt deal with its creditors also dented investor sentiment. Greek and European officials met on Monday, but there was little progress over the country’s bailout program which is about to expire by the end of this month. Monday’s slump resulted in the Dow turning negative for the year.
The Dow ended Tuesday’s trading session almost unchanged, losing a meager 0.01%. The Dow Jones Transportation Average took a beating mostly due to a drop in airline stocks. The index declined for the second straight session, losing 0.3%.
