Dow Jones Industrial Average: prospects, projections and look back

Dow Jones gathered force in the fist for a new breakthrough

In brief: Dow Jones Industrial Average managed to overcome the implacable zeal of bears and raised. Investors began to rely on analysts' forecasts. The American stock market has hope for growth.

Dow Jones Industrial Average justified forecasts of analysts, S & P rose against the distrust of investors. U.S. trades in the stock market finished the week on a positive note. Happy Friday, May 21, futures on the S & P continued to decline and reached 1051.5 points, significantly interrupting anti-record of the day “mistakes trader” and came close to the level of the three-month minimum. As a result, at the opening of trading value of the Dow Jones was substantially (80 points) below the psychologically important level of 10,000 points, which on 6 May seemed unattainable, and in February for two weeks kept the quotes from the fall.

But the bulls quickly recovered and organized a successful bounce up that takes the value of the Dow Jones nearly 300 points. The reason for optimism was the word from Europe: the lower and upper houses of parliament in Germany approved the country’s stake in the joint mechanism of the stabilization of the EU and the IMF totaling 750 billion euros – it will be from 123 to 147.3 billion euros. This decision has made some certainty to the economic prospects of a united Europe, whereas earlier investors questioned whether Germany is ready to make its full contribution to the establishment of stability in the region. As a result of growth in U.S. stock indices over 1%, and the closing took place on the highs of the day. As a result of trading on May 21 the Dow Jones index rose 125.38 points (1.25%) – up to 10,193.39 points, NASDAQ – at 25.03 points (1.14%) – up to 2,229.04 points, S & P – by 16,1 points (1.5%) and amounted to 1,087.69 points. Friday’s rise led the banking sector. The greatest gains demonstrated paper Goldman Sachs Group Inc. the emergence of rumors about the settlement of differences with the Securities Commission (SEC). Recall, the bank accused of fraud by using derivatives of mortgage-backed securities, its management charges categorically disagree. However, several hours after rumors or SEC, Goldman Sachs nor such information is not confirmed, but a source close to the negotiations said that the news is not true. As a result, the bank’s capitalization growth of 5,5% by the end of trading fell to 3.32%. Securities other industry representatives investors bought because of their strong oversold formed last month. Thus, the share price JPMorgan Chase & Co. jumped 5,87%, Bank of America Corp. – On 4,51%, Wells Fargo & Co. – On 4,95%, Citigroup Inc. – On 3,31%, US Bancorp – on 3,32%, PNC Financial Services Group Inc. – On 3,65%, and Morgan Stanley – to 5.73%.

Corporate news had an impact on the dynamics of the shares of one of the world’s largest retailers of women’s clothing AnnTaylor Stores Corp. – Capitalization of the company soared to 8.55% after the publication of strong financial report for the previous quarter. Net profit amounted to 38 cents per share, which was 2 cents higher payments industry expert. Company management also gave an optimistic forecast for 2010.: Gross margins will increase by 2.5 percentage points – 52,4%, while revenue reached 1,95-1,98 billion, while analysts forecast of $ 1.96 billion Similarly, the situation was at the clothing retailer Gap Inc. , and manufacturer of sports shoes Foot Locker – the company reported strong financial statements, and their paper went up by 1,89% and 4,02% respectively. Not so successful was one of the leading computer manufacturers – Dell Inc. According to the quarterly report, net profit increased more than 1.5 times compared with the same period a year ago, but 0.7 percentage points – Fell from 17.6% gross margin, due to increased competition and forced to lower prices for computers. In addition, production has traditionally cost Dell more expensive than competitors. Investors questioned the prospects of investment in the company and stock quotes Dell by the end of trading fell to 6.77%. Two other well-known representative of the sector of computer technology – IBM Corp. and Hewlett-Packard Co. – Looked much better: the capitalization of the first rose to 1,31%, while the second – on 1,37%. Oil prices were fixed on the eve of the psychologically important level of $ 70 per barrel. Brand Brent, and on Friday began bouncing up a bit. It looks like a mark of $ 70 per barrel. will take some time to hold “the bears”, but most likely it is not necessary, since a fall from 83 dollars per barrel. took place rapidly and without interruption, and correction up is simply necessary. Against this backdrop, a number of oil companies enjoyed strong demand: The outcome of the shares of EOG Resources Inc. went up by 4,47%, Anadarko Petroleum Corp. – On 2,77%, Devon Energy Corp. – On 2,55%, Occidental Petroleum Corp. – On 2,25%, ConocoPhillips – on 1,06%, Exxon Mobil Corp. – On 0,91%, and Chevron Corp. – 1,2%. Following Friday’s trading on the U.S. stock market appeared quite good conditions for a turn downward trend. Firstly, it has been the goal of reducing established another 6 May, and below is the minimum quotation did not go to form, thus reversal pattern “double bottom”. In addition, the closing at the maximum levels of the day on Friday, when the major players are reviewing portfolios (time professionals), allows you to bet on continued growth in the coming week. Finally, the positive point is the fact that the Dow Jones Industrial Average closed above 10,000 points mark. Overall, current levels are attractive for purchase at the prospect of two weeks.

Pavel Migin
2010-05-22 08:18, Economics.

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