Dow Jones Industrial Average: the week will bring some nasty surprises

Dow Jones Industrial is growing, but also is ready to fall

In brief: Bears are moving across the way of Dow Jones Industrial growth on the backgroung of negative news from Europe. The main challenges for the Eurozone are Belgium and Hungary.

The U.S. stock market on Friday, June 11, opened lower prices of most the blue chips. After a bad start bulls supported Dow Jones Industrial Average. A look at the market at the beginning of the week: Dow Jones Industrial Average began to grow on a background of positive news from Asia, Latin America and the United States. At the same time, European problems and political collapse in Belgium can bring some nasty surprises for Dow Jones.

Before investors put into the quote too much optimism about the future of the U.S. economy, and Friday’s positive expectations have been partially allayed by the data published macroeconomic statistics. In particular, the volume of retail sales in May fell by 1.2%, while economists have predicted his rise to 0,2%. This is the first decline in eight months and quite a negative signal indicating the skepticism of ordinary consumers as to the medium-term prospects of the market. Do not have lasted until the April forecast and the amount of stocks in warehouses: its growth rate of 0,4% instead of the expected 0.5% and was minimal in recent years. Some raise the mood of investors could publish consumer sentiment index for June, calculated by the University of Michigan. From the May level (73.6 points) rose to 75.5 points and established at a maximum of two and a half years level. The interpretation of the growth index at odds with the situation in retail. Against this backdrop, during the session on 11 June the Dow Jones index made a few attempts to approach the level of Thursday, and only in the last hour of trading managed to get a “plus”, which is a big success for the “bulls” in view of rapid growth in the previous day.

As a result of trading on June 11 the Dow Jones index rose 38.54 points (0.38%) – to 10,211.07 points, NASDAQ rose 24.89 points (1.12%), – to 2,243.6 points, S & P added 4.76 points (0.44%) and amounted to 1,091.6 points. Amid disappointing sales data leading retailers of the country have been among outsiders bidding. Quotes of the largest U.S. retailer Wal-Mart Stores Inc. fell by 0,7%, The Home Depot Inc. – On 1,53%, Costco Wholesale Corp. – On 0,23%, Lowe’s Companies Inc. – On 1,51%, Gap Inc. – On 0,32%, Staples Inc. – On 0,73%. Given the fact that in the summer buying activity may continue to decline because of seasonality, promotions retailers have every chance to remain under pressure, of course, if the economy starts to show signs of active recovery, which is very doubtful. A small downward correction in oil prices, up to a mark of $ 74.5 per barrel. sort by Brent, will be enough to divert the “minus” the paper half the oil and gas companies in the U.S.. The victims came from the sale of Exxon Mobil Corp. (-0,05%), Chevron Corp. (-0,16%), XTO Energy Inc. (-0.18%). Meanwhile, the growth could complete the day Occidental Petroleum Corp. (+1,82%), Devon Energy Corp. (0.72%) and ConocoPhillips. (0.24%). And the second group joined them and has been on for several weeks under heavy pressure the British oil giant BP Rlc., Prices of securities which soared during the day at 3.63%.

As for tech companies, investors were positive on OEM: Hewlett-Packard Co. (+1,48%), International Business Machines Corp. (0.6%) and Dell Inc. (0.61%). At the same time last Friday lowered its profit forecast for the I quarter of current fiscal year, but, as can be seen, growth is not too bothering. Significantly increased the capitalization of Motorola Inc. (3.95%): the company signed with the Canadian Research In Motion Ltd. (RIM) cross-licensing agreement, so that the lengthy court proceedings, it seems, will remain in the past. Recall, RIM Blackberry communicators produce and had a claim to Motorola in violation of several patents. Similar complaints were also received from Motorola. Quotes RIM rose only 0.66%. At the end of the day was the American stock market still “painted” one more day of growth, and apparently tried to approach the resistance at 10260 points on an index Dow Jones. Experts are inclined to believe that the rebound up from the recent “bottom” may well be considered held and the chances at the beginning of a wave reduction outweigh the chances for continued growth. The most likely scenario now appears that the Dow Jones still comes up to that mark, after which the “bears” are activated. For the speculative purchases current levels no longer interesting, and long-term investors prefer to stay outside in the summer market.

Ukrainian Globalist
2010-06-14 16:14, Economics.

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