Dow Jones Industrial Average: is market alive or dead?

Dow Jones Industrial: positive data leads to mixed dynamics

In brief: Dow Jones is growing against the great news U.S. economic statistics. Bears are no longer bother Dow Jones Industrial Average.

Bears at the time had gone to bed. Mixed dynamics of the market remains, but the Dow Jones Industrial Average strive to reach the 1.5% growth. Plus, the index remains. Now Dow Jones Industrial approached the mark of 10.135 points. Growth Dow index is equal to +109.13 points (1.09%). Statistics from the U.S. continues to do quite positive, but the market reaction is not always straightforward.

Today, once again received positive signals on the real estate market, where sales of homes in the pre-sale contracts rose by 6% in the last reporting month. Yesterday’s data on the construction sector were a real surprise. Construction costs in the U.S. rose in April for a month by 2,7%, while the consensus forecast does not assume growth. Such a high monthly growth of expenditure in the construction sector was the highest since August 2000. Of course, it is likely that construction companies active in the expectations of high growth in sales of residential property until the end of June 2010, when state support for property buyers will end its existence. On the other hand the fall of 2009, when they also experienced rapid growth in sales in the U.S. housing market, there was no active operations among the companies of the construction sector. Increased activity in the construction sector will support the U.S. labor market and a number of companies related industries such as steel. Also note that the ISM index of business activity in the manufacturing sector, although the U.S. has shown a slight decrease – less than 60 points on the end of May, but so far, of course, reflect the continuation of high growth in the industrial sector. At the same time reduce the overall ISM index was largely due to component stocks that, in principle, by contrast, viewed as a positive factor in the background of growing demand. The components of the new export orders and employment in the industrial sector, on the contrary show further steady, positive momentum. Thus, on any serious slowdown in the growth of the productive sector U.S. talk is premature.

Pavel Nurminen
2010-06-02 16:00, Economics.

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