The Dow experienced a largely negative holiday-shortened week, hit by falling oil prices and other concerns. Encouraging news from Greece helped the blue-chip index notch up gains on Tuesday. The Dow declined 0.1% on Wednesday after Fed minutes showed officials debated the effects of hiking interest rates from near zero level.
Oil prices dropped and deadlock over the Greek debt deal continued, leading to losses for the blue-chip index on Thursday. The Dow has lost 0.2% during the first four trading days.
Last Week’s Performance
Last Friday, the Dow gained 0.3%, after higher oil prices boosted energy shares. Prices of WTI crude oil and Brent crude oil increased 2.9% and 0.6% to $52.78 per barrel and $57.39 a barrel, respectively. Dow components Exxon Mobil Corp. (XOM – Analyst Report) and Chevron Corp. (CVX – Analyst Report) advanced 1.1% and 1.7%, respectively. The blue-chip index closed above the 18K mark for the first time this year.
Meanwhile, consumer confidence dropped to a three-month low in February. The University of Michigan and Thomson Reuters’ preliminary reading of consumer sentiment declined to 93.6 in February, in contrast to the consensus forecast of an increase to 98.3. Separately, U.S. import prices declined 2.8% in January, less than the consensus estimate of a 3.2% drop. However, this decline in import prices turned out to be the biggest since Dec 2008.
However, investors focused on encouraging economic growth numbers from the Eurozone. Eurozone’s fourth quarter GDP rose 0.3%, better than the estimated 0.2% gain. The fourth-quarter growth was led by Germany. Investors also kept an eye on the negotiations between Greece and its creditors over the country’s bailout package.
Over the week, the Dow gained 1.1%. Benchmarks settled in the green for the week after a ceasefire agreement between Russia and Ukraine boosted investor confidence. Easing concerns about Greece’s debt negotiations also boosted investor sentiment.
Moreover, encouraging quarterly results, including those from Cisco Systems, Inc. (CSCO – Analyst Report) and The Coca-Cola Co. (KO – Analyst Report) helped markets register solid gains. Separately, China’s disappointing trade data had a negative impact on benchmarks last Monday.
The Dow This Week
Markets were closed on Monday for Presidents’ Day holiday. Stocks started the holiday-shortened week on a positive note, banking on encouraging news from Greece. Indications that the Greek government intends to seek an extension of the country’s loan agreement program improved sentiment. However, conditions for request of new rescue deal were still under negotiations.
Economic data on manufacturing and housing was disappointing. The Empire State Manufacturing Survey Index came in at 7.78 in February, declining from 9.95 in January. Additionally, the NAHB/Wells Fargo Housing Market index slipped 2 points to 55 in February from January’s reading. The blue-chip index moved up 0.2%.
