Dow 30 Stock Roundup: Microsoft Rewards Shareholders; GE Wins $1.9B Nuclear Power Contract

The Dow experienced a strong week of gains, buoyed by the Fed’s decision to leave rates unchanged in September. Japan’s central bank’s decision to control the yield curve also provided a flip to stocks. Additionally, gains arising from developments related to major healthcare deals also lifted benchmarks. Economic data was mixed in nature while oil price movement continued to be volatile.

Last Week’s Performance

The Dow decreased 0.5% last Friday following declines in bank stocks on news that Deutsche Bank AG DB might have to pay a fine of $14 billion to settle a mortgage-backed securities case. Moreover, concerns over crude oversupply weighed on energy stocks, which also had a negative impact on key U.S. indexes.

Additionally, uncertainty remained over the timing of a rate hike ahead of the Fed policy meeting. Meanwhile, the CPI increased 0.2% in August, higher than the consensus estimate of 0.1%.

The Dow gained 0.2% over last week. Apple Inc’s AAPL shares jumped 11.4% for the week, its best rise since October 2011, after the tech-giant experienced strong demand for the new iPhone 7. Meanwhile, rate hike worries continue to inject uncertainty into the markets.

The Dow This Week

The index ended Monday mostly unchanged as investors refrained from making big bets ahead of the two-day policy meetings of the Fed and Bank of Japan (BOJ). Increase in oil prices and strong rise in home-builder confidence had a positive impact on key U.S. indexes. During the weekend, military conflicts in Libya weighed on its crude exports.

Moreover, Venezuelan President Nicolas Maduro said that both OPEC and non-OPEC countries are nearing a deal to control crude production. Both these factors boosted crude prices. According to the National Association of Home Builders and Wells Fargo, builder sentiment touched its highest level since Oct, 2015.

The index increased 0.1% on Tuesday ahead of the two-day policy meetings of the Fed and the BOJ. Inventors eagerly awaited any major policy decisions from the two central banks. Moreover, gains in healthcare stocks offset declines in energy stocks. Tobira Therapeutics, Inc’s TBRA shares jumped 720.9% after Allergan plc AGN decided to acquire the company for $1.7 billion.

Tobira develops products which are used to treat a common liver disease called nonalcoholic steatohepatitis, or NASH. Following this development, shares of Gilead Sciences Inc. GILD, which also develops drugs to treat NASH, rose 3.5%.

While acquisition news boosted the healthcare sector, crude oversupply concerns weighed on energy stocks. Oil prices closed mixed after Colonial Pipeline said that worries over supply disruptions from Gulf Coast refiners have faded as the gasoline line is expected to restart functioning.

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Chee Hin Teh 5 years ago Member's comment

Thanks for sharing