DJIA: Any good site on WHY it does what it does?

Vince Maskeeper

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GUys,

As part of a presentation for my personal finance class, I have to talk about the Dow Jones Average for the past 14 weeks and discuss why it did what it did. Since there are so many factors involved- it's had to get a real handle on the WHY's.

I wondered if there are any good anylist sites- or if anyone here knows enough about the markets to offer difinitive answers?

-Vince
 

Vince Maskeeper

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Alex,
Thanks for the suggestion- but I understand what the DJIA is and how it is calculated. What I'm wondering is, say if I can show someone a chart of what the DJIA did over the past 14 weeks- if anyone could offer the factors that influenced its increases or decreases.
Like did consumer confidence have a large impact? Were their govt regulations or laws in front of congress that had effects? Unemployment, interest rates, earning, economics slumps- etc. Why did the dow rise over the first 10 weeks and fall the last 4?
I'm just trying to figure out of anyone offers information specifically about factors that have had an influence on the markets over the previous months-- or if (as usual) most people are talking out of their ass.
-Vince
 

CameronJ

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or if (as usual) most people are talking out of their ass
But Vince, that's what Wall Street is about

Seriously though, you probably won't find something that gives you the information that you're looking for in a nice easy package.
What I would do would be to look at the economic calendar for the time period you're looking for (I used to have a link to a good one, but I lost it in my last hard drive crash). The one I used to use contained an 'expectation' and an 'actual' column. I'd also go through the paper and pull major news stories, remember that a news story in today's paper probably affected the market yesterday.
Of course, in doing this you would be forming your own conclusions about the actual events that impacted the market. In reality, that's exactly what anyone else (regardless of how much of an 'expert' they are) would be doing. The trick will be in seperating the normal market fluctuations (the part that no one can really explain) from those caused by particular events.
You could also pull each day's 'Heard on the Street' column (at least I think that's the one) from the WSJ, it usually gives a good rundown of what affected the market the previous day.
Hope this helps.
 

Alex Spindler

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Ahhhh, then I think I would only be capable of speaking out of my ass.

I would imagine that it was influenced by the following (again, just ass speaking here): Consumer Confidence, Military Activity overseas, recent international job cuts, and the recent decision to release more Pan and Scan DVDs (
).
Here is a analysis summary and link page I saw some time ago. I have no idea the depth or validity of any of them, but they might proffer some real analysis.
 

Michael Reuben

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Vince --

1. Get the Wall Street Journal for the last 14 weeks (I'm sure the university library keeps it on file; online access requires a subscription).

2. Go to the "C" section and read the column entitled "[Yesterday's] Markets" (instead of "Yesterday", it will list the previous trading day, Monday through Friday). Skip the "Heard on the Street" column; it can be interesting, but it doesn't attempt to give an overview.

3. Make a list for each day of the factors identified in the column as affecting the previous trading day. Some of the factors will be listed by the reporter; others will be in quotes from analysts, pundits, etc.

4. Over the course of 14 weeks, you'll find certain factors cited more often than others. That will give you some idea of the consensus in the financial world about what moved the markets.

This procedure may not have the elegant simplicity of a weblink, but it's the most direct route I can think of for cutting through the massive amounts of "ass-talking" that passes for financial commentary.

M.
 

Vince Maskeeper

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I do have a WSJ subscription- but unfortunately have recycled all but the past weeks. I tried to setup an account on their website- but it said my account was invalid. Oh-well, off to the library I guess.

-Vince
 

John Tillman

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Generally what moves the markets:

Monthly economic reports from Washington including, job (employment) info, housing and federal rate positioning which changed in the last quarter from easing to neutral.

Middle East tensions which immediately effect crude oil.

Corporate earnings. Most companies are meeting lowered expectations but heavyweights such as Microsoft or IBM have disappointed. General lethargic business environment, most companies still sitting on their ass and the floor is littered with banana peels. New orders not present. Defense (Lockheed) doing ok. Consumer doing ok.
 

Anthony_J

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I'll just echo what's already been said.

There's no one place to get a view on why the DJIA moved like it did. The best you can do is take a look at daily articles that gave a recap of the previous day's trading activity. I know the AP generally issues a summary report for the day's activity after the market closes (4:00 Eastern) and they include general indications of why the market did what it did.

Although I haven't been following the market too closely lately, I don't recall any major factors that are driving investor activity. It's mainly been general economic factors (e.g., Fed says recovery is slow, etc.).

Check the business section in any paper for the AP articles. If you need to get more specific on certain topics identified in the AP article, then I'd go to a financial journal like WSJ or Barron's.
 

Brian Perry

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One thing I really hate is when the Dow is down about 6 points, and the newsperson will say some BS like, "the Dow was down 6 today due to concerns that corporate earnings will be down," etc. No, the Dow was down 6 simply because the movements and weightings of the 30 Dow stocks ended up slightly negative. In fact, it is possible that most of the stocks were up that day, and one or two heavyweights brought it down. It galls me that they feel they have to say something.
 

Denward

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Vince,

I would focus on the days with the biggest changes (i.e. 10 biggest positives, 10 biggest negatives) and then look up news articles either from that evening or the next day and see what factors come up most often. This should make your task a little easier. The days with smaller changes probably will have less meaningful ass-talking commentary.
 

AviTevet

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14 weeks... I think the major news items in that time frame have been Enron (the market went down because of accounting worries), investor hope for a quick economic rebound (some govt data showed that the economy was coming back stronger than Greenspan expected), and as stupid as it sounds, news about GE & MS (2 biggest US companies?). GE news being investor fears about them not being able to keep increasing earnings and them turning into a financial services co, and MS news being worry over the outcome of the anti-trust lawsuit. Take it with a grain of salt though.
 

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