Dow drops what does that mean

Read: Why a bond rally could drive the year Treasury yield lower still, even as inflation expectations become unmoored. Earnings highlights for the week ahead include Netflix Inc. Earnings Preview: What does a mature streaming service look like? Netflix is about to show us. Meanwhile, the National Association of Home Builders said its monthly confidence index fell one point to a reading of 80 in July. Negative headlines have come in rapid fire for the company in recent weeks—and it dramatically missed sales estimates for the third quarter.

Based in New York, Watts writes about stocks, bonds, currencies and commodities, including oil. He also writes about global macro issues and trading strategies. Home Markets Market Snapshot. Market Snapshot Dow books point loss, worst day since October, as spread of delta variant and global tensions rattle investors Last Updated: July 19, at p. ET First Published: July 19, at a.

The bond market has been louder and more persistent in its warnings. The yield on the year Treasury tends to move with expectations for economic growth and for inflation, and it has been sinking since late March when it was at roughly 1.

It fell to 1. Analysts and professional investors say a long list of reasons is potentially behind the sharp moves in the bond market, which is seen as more rational and sober than the stock market. But at the heart is the risk the economy may be set to slow sharply from its current, extremely high growth. Besides the new variants of the coronavirus, other risks to the economy include fading pandemic relief efforts from the U. Even companies reporting strong profit growth got swept up in the downdraft.

That would be the strongest growth since , when the economy was climbing out of the Great Recession. The price of benchmark U. Facebook Twitter Email. Why did the Dow drop points on Monday? Troise The Associated Press. Show Caption. In Aug. No mathematical model is perfect—each comes with its merits and demerits. Price weighting with regular divisor adjustments does enable the Dow to reflect the market sentiments at a broader level, but it does come with a few criticisms.

Sudden price increments or reductions in individual stocks can lead to big jumps or drops in DJIA. Certain corporate actions, like a dividend going ex i.

High correlation among multiple constituents also led to higher price swings in the index. As illustrated above, this index calculation may get complicated on adjustments and divisor calculations.

After nearly years as a marker of major market developments, the DJIA is still one of the most recognized and cited of all market indexes. While it may not represent new market opportunities and early-stage fast-growing companies, and may not be indicative of the overall economic strength of the U.

So, despite all of its shortcomings, the Dow is still one of the most-watched indicators for stock market performance and the shape of the U. Accessed Aug. The Library of Congress. Valeriy Zakamulin. Springer, Wall Street Journal.

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