Dow Jones index set to end 13 day winning streak
Reuters
Published Jul 27, 2023 03:21PM ET
Updated Jul 27, 2023 08:26PM ET
By Noel Randewich
(Reuters) - The Dow Jones Industrial Average was on the verge of ending its longest winning streak in 36 years on Thursday, successive gains showing that Wall Street's tech-driven rally is broadening to include a wider chunk of the stock market.
The Dow closed higher for 13 straight sessions through Wednesday, its longest series of positive closes since 1987, and was last down 0.5% on Thursday afternoon after gaining earlier in the session.
While the S&P 500, which includes over 500 stocks, is many investment professionals' preferred stock market benchmark, the Dow's daily moves are widely quoted in news media, making it widely recognized by many Americans.
Its recent rally comes as traders widely believe that the U.S. Federal Reserve's 25 basis point rate hike on Wednesday was the last in its campaign to control inflation. Investors are also optimistic the U.S. economy will avoid a recession.
The Dow's longest-ever winning streak was 14 sessions, set in 1897, according to S&P Dow Jones Indices.
Even after its recent gains, the Dow has lagged Wall Street's other main indexes in 2023. It is up 7% year to date, compared to a 18% gain in the S&P 500 and the Nasdaq's 35% surge.
"The Dow has been the laggard of the big three, and now it seems to be playing catch up. I think that catch-up trade is bringing us to a healthier place," said Art Hogan, chief market strategist at B Riley Wealth.
The Dow's 30 constituents do not include market heavyweights Tesla (NASDAQ:TSLA), Meta Platforms, Nvidia (NASDAQ:NVDA) or Amazon (NASDAQ:AMZN), major winners in a stock market rally this year fueled by optimism about artificial intelligence and an eventual end to the Fed's rate hikes.
"We are actually seeing the market broaden out, so it's not just about seven artificial intelligence anointed darlings," Hogan added.
Dow components Salesforce (NYSE:CRM), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) have rallied between 40% and 70% this year, making them the Dow's top performers. But the Dow has also been held back by declines of 10% or more in Amgen (NASDAQ:AMGN), Chevron (NYSE:CVX), Verizon Communications (NYSE:VZ) and Walgreen Boots Alliance. Overall, nearly half of Dow constituents remain down in 2023, even after outperforming so far in July.
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While the Dow's recent winning streak is unusually long, its overall strength has not been exceptional. The index climbed 4.8% since July 7, compared to 3.1% increase in the Nasdaq and a 3.4% rise in the S&P 500.
The Dow's last 13-day winning streak in January 1987 produced a gain of 11.1%.
Written By: Reuters
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