The Dow had a disappointing week, weighed down by several
disparate factors. Investors took a breather on Monday as the blue
chip index ended a six-day rally, closing with minute losses. The
Dow suffered its largest loss in over a month on Tuesday following
tensions in Iraq. Wednesday was the brightest spot of the week for
the blue chip index, as it moved upward buoyed by gains in media
stocks. But the Dow fell once again on Thursday following comments
from a Fed official on the timing of a rate hike. During the first
four trading days, the Dow has lost 0.54%.
Last Week's Performance
The Dow added almost 0.2% on Friday as optimism from Wednesday's
Fed policy statement spilled over into a second successive day. The
Dow extended its winning streak to six sessions; it's longest since
Dec 2013. The blue-chip index also settled at a record high. On
Friday, volumes were also higher than usual on a "quadruple
witching" day. A quadruple witching refers to the third Friday of
every March, June, September and December. On these days, market
index futures, market index options, stock options and stock
futures expire, usually resulting in increased volatility.
For the week, the Dow gained 1%. Benchmarks ended in positive
territory for the week as optimism from Wednesday's policy
statement continued. Gains in financial and small-cap stocks also
ensured a positive finish for the benchmarks. Several new deals
also boosted investor sentiment. Encouraging data on manufacturing
activity in the New York region, industrial production and U.S.
homebuilders' confidence also added to the bullish sentiment.
However, gains were kept in check, owing to concerns over sectarian
clashes in Iraq and its effect on crude
. On Monday, militants in Iraq published images of hundreds of
executed Shiite Iraqi soldiers. The militants claimed to have
executed the soldiers. The Wall Street Journal had reported that
militant rebels and government forces continued their fight and
killed 28 ISIS fighters. Iraq accounts for 3.3 million barrels of
crude every day.
The Dow This Week
Benchmarks traded mostly in the negative zone before closing
Monday's trading session little changed as investors took a
breather. The Dow snapped a six-day rally and closed with minute
losses, declining nearly 0.1%. New deals between
Wisconsin Energy Corp.
Integrys Energy Group, Inc.
MICROS Systems, Inc.
) were welcomed by investors. Meanwhile, General Electric's
purchase of Alstom's energy assets had a negative impact on the
industrial sector. The day's positive economic data on existing
home sales failed to drive benchmarks higher.
The blue chip index declined 0.7% on Tuesday, suffering its biggest
drop in over a month. The day's initial gains, largely a result of
encouraging home sales data and an improvement in consumer
confidence, were eroded by the end of the trading session. The
Consumer Confidence Index increased from 82.2 in May to 85.2 in
June.Additionally, new home sales in May touched the highest annual
level in six years. However, benchmarks reversed course post noon
to settle in the red on Tuesday. Escalating tension in Iraq was
cited as the primary reason that led to the selloff.
Gains in media stocks helped benchmarks shrug off weak economic
data and settle in the green on Wednesday. Investors ignored the
biggest contraction of the U.S. economy in the first quarter since
early 2009 and also overlooked an unexpected fall in durable goods
orders. Broadcaster stocks rose on Wednesday after Supreme Court
ruled in their favor over start-up online-video service provider,
Aereo Inc. However, oil refinery stocks declined after The Wall
Street Journal reported that the U.S. is about to ease the ban on
crude oil exports for the first time in nearly 40 years. The Dow
The Dow declined 0.1% on Thursday following St. Louis Fed president
James Bullard's comments on a rate-hike. Bullard expects the key
interest rate hike to take place sooner than anticipated. The
blue-chip index had dropped as much as 119 points, before trimming
losses in the post noon session. Economic data on personal
consumption expenditure was weaker-than-expected. However, personal
income and claims for unemployment benefits were in line with
Components Moving the Index
General Electric Company
) won unanimous approval of the French conglomerate Alstom's board
to acquire its energy assets in a $16.9 billion deal, taking it a
step closer to clinching its biggest acquisition ever. The board's
approval came a day after the French Socialist government gave
General Electric the go-ahead to acquire most of Alstom energy
operations. The deal, subject to customary regulatory and
shareholder approvals, is expected to conclude in 2015.
General Electric cleared the final obstacle in the energy deal with
the French government agreeing to acquire 20% stake in Alstom from
its leading stakeholder Bouygues. The arrangement will grant the
government an option to buy the stake in Alstom, which will get
activated after the closing of the General Electric-Alstom deal and
expire after 20 months.
) announced the launch of Android smartphone - X2 - under
) X family of low-cost devices. The new handset has larger display,
improved rear-facing cameras and better performance compared to the
original Nokia X.
) Android OS, Nokia X2 offers a 4.3-inch ClearBlack display,
5-megapixel rear camera, VGA front camera, 4GB internal storage,
1GB RAM and Snapdragon 1.2GHz dual-core processor, while the
original Nokia X had a 1Ghz processor. Currently available in
select countries for €99, Nokia X2 will be rolled out globally in
) recently stated that their FlexPod solution has generated over $3
billion in combined sales. FlexPod has gained in popularity since
the companies came together to launch the series in Nov 2010.
Flexpod shipments have registered staggering growth of 81% year
over year coupled with an average demand of $2 billion on an annual
NetApp and Cisco collaborated to introduce this product, which is
expected to accelerate the transition to the cloud. The FlexPod
integrated infrastructure solution is built on a flexible,
scalable, shared infrastructure that combines computing, networking
and storage solutions.
) share price fell by 1.6% on Tuesday following news that the
company intends to team up with state-run Turkish Petroleum
Corporation for possible exploration of shale gas in the country's
southeast and northwest regions. The news was reported in Reuters.
The two parties had held talks in 2012 but there was no successful
outcome. However, later, the negotiation progressed and now, it is
likely to result into an agreement. ExxonMobil has shown interest
to explore the onshore prospects in the southeast and in Thrace,
which is in northwestern Turkey.
Wal-Mart Stores, Inc.
) Sam's Club division has launched an online booking service -
Sam's Club Travel - to serve the business and leisure travel needs
of its members. It has partnered with Tourico Holidays, a worldwide
leader in innovative wholesale travel services, in this regard.
Tourico's business model aims to provide reasonable deals to its
members, even amid rising costs of fuel, flights and
Through its SamsClub.com/travel website, Sam's Club members can
select their choice of destination or opt for any vacation package
and also save on every package selected from an available range of
4,500 worldwide destinations, 90,000 hotels, 150 airlines, 18 car
rental brands and 13 cruise lines. The website is user-friendly,
hassle-free and does not allow pop-up windows and external sites to
Performance of the Top 10 Dow Companies
The table given below shows the price movements of the 10 largest
components of the Dow, which is a price weighted index, over the
last five days and during the last six months. Over the last five
trading days, the Dow has lost 0.64%.
Last 5 Day's Performance
6 Month Performance
Next Week's Outlook
Markets have ignored crucial economic data such as the
contraction in first quarter GDP. A fall in durable orders and
less-than-expected personal consumption expenditure have also
failed to guide the markets. Instead, the situation in Iraq and
comments on the timing of an interest rate hike has held
The conflict in Iraq and its effect on oil prices will possibly
continue to effect market movement. Further comments from the Fed
may also impact markets, depending on the nature of the statements.
However, next week has some crucial reports lined up. This includes
ISM data on manufacturing and the services sector, construction
spending and the unemployment rate. Positive data from these
sources could play a key role in putting the markets back on
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WAL-MART STORES (WMT): Free Stock Analysis
WISC ENERGY CP (WEC): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
NOKIA CP-ADR A (NOK): Free Stock Analysis
CISCO SYSTEMS (CSCO): Free Stock Analysis
NETAPP INC (NTAP): Free Stock Analysis Report
INTEGRYS ENERGY (TEG): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis Report
MICROS SYS (MCRS): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis Report
GOOGLE INC-CL A (GOOGL): Free Stock Analysis
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