The Dow Jones added another 100 points during Friday’s session

VaselineAugust 16, 2024

0 3 minutes read

The Dow Jones added another 100 points during Friday’s session

The Dow Jones posted fresh gains on Friday as investor sentiment picked up.

Stocks are on pace for one of the best weeks of the year.

Indicators of consumer sentiment ticked higher on Friday.

The Dow Jones Industrial Average (DJIA) closed 100 points higher on Friday after starting the day off the lower side. Offers tested a low earlier in the day before recovering the 40,500.00 level, and investors are enjoying one of the index’s best weekly performances of the year to date.

The Dow rose nearly 4 percent from Monday’s open as investors hit the buy button after improving U.S. economic data helped traders shake off broad U.S. recession fears. The University of Michigan’s August consumer sentiment index improved to 67.8, well above the previous 66.4 and beating the forecast of 66.9.

Improving consumer sentiment indicators helped boost investor confidence, despite 5-year consumer inflation expectations holding firm at 3.0% on Monday in August. Bets on a double Federal Reserve (Fed) rate cut in September have narrowed to just 25%, down from last week’s peak of 70%, but markets are still pricing in some form of rate move on 18 September, with rate markets slashing the odds of a 25 bps rate cut to 75%.

Dow Jones News

A Friday risk means most of the Dow Jones index was green for the day. Less than a third of the DJIA saw red on Friday, with losses led by Caterpillar Inc. (CAT) and Microsoft, both down about six-tenths of one percent. CAT traded near $343.15 per share, while MSFT struggled at $418.60. Boeing Co. (BA) and Cisco Systems Inc. (CSCO) led the charts, each gaining just under 2% on the day, with BA testing $180.00 per share and CSCO within reach of $50.00.

Read more: Nike stock gains on continued interest in Ackman stake

Dow Jones Price Forecast

The Dow Jones posted a 3% one-week gain on Friday, poised to post the index’s best weekly performance since 2024. All-time highs of 41,371.38 set in mid-July are back in sight for bidders, while DJIA prices are heading back to the upper side after last week’s brief dip below 38,500.00.

The Dow is testing deep in the green for a fourth consecutive day, trading in the 40,750.00 touch range after buyers saw a thin technical rally from Monday’s lows at the 39,250.00 level. Price pressures will begin to increase as offers approach 41,000.00, but the DJIA continues to have a solid run as prices move well north of the 200-day exponential moving average (EMA) at 38,053.00.

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.