The Dow Jones is trying to regain ground once again

VaselineAugust 8, 2024

0 3 minutes read

The Dow Jones is trying to regain ground once again

The Dow Jones climbed more than 500 points on Thursday.
US stocks are attempting a third rally.
Risk appetite is slowly rebuilding as investors return to rate cut watch.

The Dow Jones Industrial Average (DJIA) recovered more than 500 points during Thursday’s market session as markets took another run to push stocks back onto an upbeat trajectory after a short-term decline fueled by fresh fears of US recession. Market flows are starting to return to normal, or some version of it, and indices are making another crunch to recover lost ground. However, the Dow Jones still remains on the wrong side of price action and is struggling to regain the 40,000.00 handle.

Initial US jobless claims for the week ended August 2 were printed at 233,000, short of the forecast of 240,000 and down from 250,000 the previous week. The drop in initial jobless numbers is helping investors keep a lid on recent recession fears after last week’s download of US labor data sparked a firm bid to reduce risk.

US data watchers will be on the lookout for a new round of consumer and producer inflation figures due next week. US producer price index (PPI) inflation is scheduled for next Tuesday and consumer price index (CPI) inflation next Wednesday.

Dow Jones News

The Dow Jones is in broad recovery mode, with almost all of the index’s listed stocks in the green on Thursday. The Walt Disney Co. ( DIS ) is still down -1.13% and testing below $85.00 per share after reporting weaker-than-expected profits from its theme park operations despite rising streaming services revenue.

Intel Corp. (INTC) is in recovery mode on Thursday, rising more than 4% and approaching $20.00 per share after hitting a new 52-week low earlier in the day. The tech giant is seeing its share price rise after investors were spooked by a slight drop in Q2 earnings and a downward revision to Intel’s Q3 guidance.

Dow Jones Price Forecast

The Dow Jones reclaimed the 39,000.00 handle in another intraday bid to spark fresh momentum, and bidders will be hoping the third time is the charm after repeated failures to make meaningful headway this week. The index avoided falling back below the 38,500.00 level after its latest three-day slide that dragged the stock board down -6.58% from top to bottom, and bulls remain determined to keep the Dow Jones trading above 200 day exponential moving average. (EMA) at 38,011.45.

Dow Jones Daily Chart

Dow Jones FAQ

The Dow Jones Industrial Average, one of the world’s oldest stock indices, is compiled from the 30 most traded US stocks. The index is weighted by price rather than capitalization. It is calculated by summing the prices of the constituent shares and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In subsequent years, it has been criticized for not being broadly representative enough, as it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

Many different factors determine the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in the company’s quarterly earnings reports is the main one. US and global macroeconomic data also contribute as they impact investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA because it affects the cost of credit, on which many corporations depend heavily. Therefore, inflation can be a major factor as well as other indicators influencing the Fed’s decisions.

The Dow Theory is a method of identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only watch for trends where both are moving in the same direction. Volume is a confirmation criterion. The theory uses peak and trough elements of analysis. Dow’s theory posits three phases of a trend: accumulation, when the smart money starts buying or selling; public participation, when the general public joins in; and distribution, when the smart money comes out.

There are several ways to trade the DJIA. One is the use of ETFs that allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A prime example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures allow traders to speculate on the future value of the index, and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds allow investors to buy one share of a diversified portfolio of DJIA stocks, thereby providing exposure to the overall index.

VaselineAugust 8, 2024

0 3 minutes read