The Dow jumped 250 points as volatility continues to be sparked by the omicron variant. Dow Jones Industrial Average (DJIA) is a widely watched benchmark index in the United States for blue-chip stocks. It is a price-weighted index-tracking 30 large, publicly-owned companies trading on the New York Stock Exchange (NYSE) and the Nasdaq.
The Dow Jones Industrial Average was founded in 1896, and its performance is widely considered a good indicator of the health of the US stock market. Charles Dow and Edward Jones created Dow Jones & Company, where the Dow Jones Industrial Average is derived. S&P Dow Jones Indices now maintain Dow Jones Industrial Average, and the 30 Dow stocks are now selected from the 500 securities included in the S&P 500, except transportation and utility stocks.
Stocks with greater share prices are given greater weight in the index. Rather than dividing the sum of the component price by the number of stocks in the index, a special divisor is used to divide the component price sums.
As we enter the last month of 2021, Wednesday, December 2, marked the first trading day. During the first day of December, the Dow jumped 250 points as volatility continues to be sparked by the omicron variant.
As stock markets rallied Tuesday, Fed chief Jerome Powell said he was open to a faster bond taper at the Fed’s December meeting. As Moderna (MRNA) previously stated, existing vaccines may be significantly less effective than the Omicron Covid variant.
It was a rare bright spot for Apple stock on Tuesday, with iPhone sales in China reportedly booming. Major indexes also closed slightly off lows, but the major indexes are testing or undercutting key levels while market breadth deteriorates.
According to Wolfe Research strategist Chris Senyek, “The recent selloff is a longer-term buying opportunity. Investors who want to avoid a potential big drawdown (while giving up some potential upside) could wait until the December 15 board meeting.”
Earlier this week, Fed Chairman Jerome Powell said the central bank would likely discuss speeding up its minimum $120 billion bond-buying programs. The Fed chief said that reducing the pace of monthly bond purchases can move faster than the $15 billion schedules announced earlier this month, despite the potential disruption of omicron.
Powell said the economy is robust and inflationary pressures are high, so tapering our asset purchase program may be appropriate at this point, perhaps a few months sooner. Our next meeting will likely cover that topic,” Chris Senyek said. The Goldman Sachs economists anticipate the Federal Reserve will double its monthly spending to $30 billion by June and implement its first rate hike of the pandemic era.
