The DOW had another mixed week, hampered by losses on dismal economic data. The blue-chip index ended in the green on Monday, despite reports of slowdown in manufacturing activity and consumer spending. The DOW moved lower on Tuesday following a disappointing monthly car sales report and comments from Israel’s Prime Minister.
The blue-chip index again ended in the red on Wednesday after private-sector employment gains declined in February. The DOW snapped a two-day losing streak on Thursday, somewhat boosted by the ECB’s announcement of a trillion-dollar stimulus plan that will kick off on Monday.
Last Week’s Performance
Last Friday, the DOW lost nearly 0.5% as investors weighed positive housing and consumer confidence data against slowdown in the U.S. economic growth. Fourth-quarter GDP increased at an annual rate of 2.2%, less than the “advance†estimate of a rise by 2.6%. However, this rise in fourth quarter GDP was more than the consensus estimate of an increase by 2%. Additionally, Chicago PMI numbers touched its lowest level since Jul 2009.
Meanwhile, the Pending Home Sales Index went up 1.7% to 104.2 in January, its highest level since Aug 2013. Separately, the University of Michigan and Thomson Reuters’ final reading of consumer sentiment was at 95.4 in January. This was more than the consensus forecast of an increase to 93.8.
Over the week, the blue-chip index dropped a meager 0.04%. Benchmarks ended mostly in negative territory for the week after decline in oil prices affected energy shares. A drop in consumer price index and increase in initial claims also dented investor sentiment.
The DOW gained 5.6% in February, its best monthly gain since Jan 2013. Strong earnings results by retailers and tech companies, firming up of oil prices, and easing concerns in the Eurozone helped benchmarks register solid gains in February.
Additionally, Fed chairwoman Janet Yellen said the central bank will evaluate economic conditions before considering a rate hike. She added the central bank is looking to retain flexibility to make such a decision “on a meeting-by-meeting basis.â€
The DOW This Week
Markets ended in the green on Monday, despite reports of slowdown in manufacturing activity and consumer spending. ISM’s February PMI decreased 0.6 percentage points from January’s reading of 53.5% to 52.9%. Personal consumption expenditure decreased 0.2% in January. Additionally, construction spending declined 1.1%.
In contrast, Markit‘s U.S. PMI increased to 55.1 in February, its highest level since Oct 2014. Interest cuts in China helped benchmarks gain on Monday. The People’s Bank of China (PBOC) trimmed its benchmark interest rates by 25 basis points to 5.35%. PBOC cut its interest rates for the second time in three months due to deteriorating economic conditions in China.
The DOW gained almost 0.9% to close at a record high for the fourth time this year, with 26 out of its 30 components ending in the green. While, Visa Inc. (VÂ –Analyst Report) gained the highest among Dow components, IBM Corp. (IBMÂ -Â Analyst Report) dropped the most. Shares of Visa went up 2.6%, while shares of IBM declined 0.9%.
