The Dow experienced a slightly volatile but overall positive week. The Dow posted solid gains on Monday after weak jobs report raised hopes of a delay in interest rate hike. Stocks lost all their day’s gains during the closing hours on Tuesday on apprehensions about the first quarter earnings results.
The blue-chip index ended Wednesday’s volatile trading session with modest gains after Fed minutes hinted at a possible rate hike this year. The Dow moved upward on Thursday, helped by gains in energy shares due to rise in oil prices. The Dow has gained 1.1% during the first four trading days of the week.
Last Week’s Performance
Last Thursday, the Dow gained 0.4% following an encouraging initial claims report. Initial claims declined 20,000 for the week ending Mar 28 to 268,000. This was the lowest level in nine months and also exceeded the consensus estimate of 288,000. Moreover, the 4-week moving average also decreased 14,750 from previous week’s level to 285,500.
Additionally, trade deficit for February declined following a fall in level of both imports and exports. Imports experienced the highest month-over-month decline since the great recession. In contrast, new orders for manufactured goods increased 0.2% in February.
Energy shares also ended in positive territory, despite drop in oil prices. Crude oil prices took a beating after investors feared the agreement on Iranian nuclear deal may lead to oversupply of oil in the world market.
The blue-chip index advanced 0.3% during the holiday-shortened week. Stocks posted gains following China central bank governor’s indications about additional monetary stimulus boosted investor sentiment. Deal news in the domestic healthcare sector also aided benchmarks.
Among the negatives, weak economic data adversely affected benchmarks. Disappointing jobs and manufacturing data dampened investor sentiment. Separately, continuous drop in oil prices are also putting a lot of pressure on energy companies. Weakness in healthcare and industrial shares dragged benchmarks significantly lower on Tuesday.
The Dow This Week
Stocks posted solid gains on Monday after weak jobs report raised hopes of a delay in interest rate hike. Last Friday’s nonfarm payroll data showed job additions slumped to a 15-month low in March. Job additions fell below 200,000, bringing an end to the unbroken run of 12 such successive monthly gains. Additionally, data for both January and February was revised downward. Meanwhile, U.S. service sector growth rate also touched a three-month low last month.
Adding to the bullish sentiment, New York Fed President William Dudley said the timing of hiking rates “will be data dependent and remains uncertain because the future evolution of the economy cannot be fully anticipated.†Energy shares gained as oil prices moved north. Expectations on Iran taking longer time to increase oil exports and anticipation that rise in U.S. crude inventories is slowing down boosted oil prices on Monday. Saudi Arabia hiked prices for oil exports to Asia, also boosting oil prices. The Dow gained 0.7%.
