Free Essay

Dow Jones

In: Business and Management

Submitted By kitty221
Words 344
Pages 2
The Effect of the 2008 Recession on the Dow-Jones Industrial Average On October 9, 2007, the Dow closed at its pre-recession all-time high of more than $14,000 per share. However, fourth quarter GDP growth was -1%, signaling the beginning of the recession. The Dow started falling slowly. After the failure of Bear Stearns in April 2008, and a negative GDP report in Q2 2008, the Dow plummeted to 11,000. Many analysts felt that this 20% decline was the market bottom. 2008 was a historic year for the Dow Jones Industrial Average and the overall Stock Market. 2008 started off with the Dow Jones breaking down through 13,000 with massive volume. There is a saying that states that whatever the Stock Market does in January is how the rest of the year would go. The saying turned out to be true in 2008. Wall Street stocks were plummeting in January and were reduced by one half throughout the year. However, on Monday, September 15, 2008, Lehman Brothers declared bankruptcy. On Wednesday, anxious bankers withdrew $144 billion from money market funds, nearly causing a collapse. In response, the Dow sank 13% in October. By November 20, 2008, it fell to 7,552.29, a new low. This was not yet the true market bottom. The Dow went up to 9,034.69 on January 2, 2009 before falling down to 6,594.44 on March 5, 2009. Between its highest and its lowest, the Dow plummeted over 50% in just 17 months. The stock market, as measured by the Dow Jones Industrial Average, has historically performed similarly to the economy. Usually a bear market occurs during a recession, and a bull market during an expansion. The history of the stock market since the Great Depression shows these are a natural, though painful, part of the business cycle. However, the Dow closing history in this recession is worse than any other. So far, the Dow has dropped over 50%, the worse decline since the 80% drop during the Great Depression.

Similar Documents

Free Essay

Dow Jones Index

...Course- Introduction To Business Name- Mohammad Mowla Date- 11/04/13 Case Assignment # 2 Dow Jones Index ( McDonald's ) The Dow Jones Industrial Average is average price of 30 stoccks traded on the New York Stock Exchange and Nasdaq. Charles Dow invented Dow Jones Industrial Average in 1896. Companies like General Electric, Disney, Exxon and Microsoft includes in the Dow Jones Industry Average. DJIA is one of the single and oldest index in the world. Roy Kroc discovered a small burger restaurent in california. From that time now it serve to 118 countries now with more than 34,000 restaurents serving nearly 69 millio people everyday.In 1961, Ray launched a training program, later called Hamburger University, at a new restaurant in Elk Grove Village, Illinois. There, franchisees and operators were trained in the scientific methods of running a successful McDonald’s. Hamburger U also had a research and to develop new cooking, freezing, storing and serving methods. Today, more than 80,000 people have graduated from the program. Sustainability is an important focus for McDonald’s. Their sustainability efforts shows that their business policies and practices complements their company and makes a positive impact on societies it’s involved in. McDonald’s rising and continual existence is very significant, along with numerous opportunities and expectations. It is employing over 1.8 million employees all around the world in over 118......

Words: 485 - Pages: 2

Free Essay

Using Simple Regression Model to Explain the Relationship Between 3-Month T-Bill Rate and Dow-Jones Index

...relationship between 3-Month T-bill rate and Dow Jones Index Index 1. Introduction………………………………………………3 2. Modeling the relationship between the 3-Month T-bill rates and Dow Jones Index (First Model)……………………3 3. Hypothesis and Testing…………………………………...4 4. Empirical Analysis………………………………………...5 5. Further Comparison………………………………………5 6. Conclusion…………………………………………………7 7. Appendix……………………………………………………8 8. Reference…………………………………………………..10 1. Introduction The 3-month T-bill rates and Dow Jones index are really close to the whole economic environment; the 3-month T-Bill rates are the preeminent default-risk-free rates in the US money market that is often used by researchers to proxy the risk-free asset whose existence is assumed by much conventional finance theory. Given their importance and visibility, it is not surprising that these interest rates has been studied extensively in economic and finance. Dow Jones Index, undoubtedly, is one of the most important economic indicators of the global financial market, This paper investigates the relationship between these two important economic data. In order to cover the business circle, the data which I choose is from 2001/01/01-2010/12/31, including the subprime lending crisis period. I use SAS and excel to get the information which indicates the relationship between these two representing data. 2. Modeling the relationship between the 3-Month T-bill rates and Dow Jones Index (First......

Words: 1539 - Pages: 7

Premium Essay

Mcdonald's Faces 'Millennial' Challenge

...8/30/2014 McDonald's Faces 'Millennial' Challenge - WSJ Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com See a sample reprint in PDF format. Order a reprint of this article now BUSINESS McDonald's Faces 'Millennial' Challenge Customers in Their 20s and 30s Are Defecting to Fast-Casual Restaurants Like Chipotle, Five Guys By JULIE JARGON Aug. 24, 2014 9:05 p.m. ET McDonald's is trying to enhance its credibility with young customers by marketing more on digital channels and testing mobile ordering and payment. Associated Press Behind McDonald's Corp.'s worst slump in a decade is a trend that may augur even tougher times ahead: The Golden Arches is losing its luster with younger consumers. The world's largest restaurant company by revenue earlier this month reported its sharpest monthly decline in global same-store sales since early 2003, adjusted for calendar irregularities. In the U.S., with more than 40% of McDonald's 35,000-plus global locations, sales at restaurants open at least 13 months have been flat or falling for most of the past year. The hamburger giant on Friday announced it was replacing the head of its U.S. division for the second time in less than two years. The company tapped a former executive, Mike Andres, to take the......

Words: 1562 - Pages: 7

Free Essay

Obama

...10/23/2014 Global Growth Woes Threaten to Beset U.S. Economy - WSJ - WSJ This copy is for your personal, non-c ommercial use only. To order presentation-ready copies for distribution to your c olleagues, c lients or customers visit http://www.djreprints.com. http://online.wsj.com/articles/global-growth-woes-threaten-to-beset-u-s-economy-1413924119 ĚČǾŇǾMỲ Fįvě-Ỳěǻř Řěčǿvěřỳ Fǻčěș Ŀǻțěșț Țěșț ǿf Řěșįŀįěňčỳ ǻș Ěxțěřňǻŀ Șħǿčķș Mǿųňț Bỳ JǾȘĦ ŻŲMBŘŲŇ ǻňđ ŇİČĶ ȚİMİŘǺǾȘ Ǿčț. 21, 2014 4:41 p.m. ĚȚ Țħě șpěčțěř ǿf đěfŀǻțįǿň įň Ěųřǿpě ǻňđ ǻ șŀǿẅđǿẅň įň Čħįňǻ ǻňđ ǿțħěř ěměřģįňģ mǻřķěțș ǻřě țħřěǻțěňįňģ țǿ ħǿbbŀě țħě Ų.Ș. ěčǿňǿmỳ ǻț ǻ țįmě ẅħěň țħě ẅǿřŀđ čǿųŀđ ųșě ǻ řěŀįǻbŀě ģřǿẅțħ ěňģįňě. Șțǿřmș ǻbřǿǻđ ħǻvě țħřěǻțěňěđ țǿ čǻpșįżě țħě Ų.Ș. ěčǿňǿmįč ěxpǻňșįǿň įň ěǻčħ ǿf țħě pǻșț fǿųř ỳěǻřș. Ěǻčħ țįmě, țħě Ų.Ș. ěčǿňǿmỳ ħǻș ẅįțħșțǿǿđ țħě bųmpș—įňčŀųđįňģ țħě ěųřǿżǿňě đěbț čřįșįș ǻňđ țħě Jǻpǻňěșě ňųčŀěǻř đįșǻșțěř—čǿňțįňųįňģ ǿň įțș șŀǿẅ-bųțșțěǻđỳ ģřǿẅțħ țřǻjěčțǿřỳ. Ňǿẅ, țħě ģǻțħěřįňģ ǿvěřșěǻș șħǿčķș ǻřě čǿmįňģ ǻș țħě Fěđěřǻŀ Řěșěřvě běģįňș țǿ pųŀŀ bǻčķ ǿň țħě ěǻșỳ-mǿňěỳ pǿŀįčįěș įț ħǻș ěmpŀǿỳěđ țǿ ǻįđ țħě řěčǿvěřỳ. Ẅħįŀě ǿvěřǻŀŀ jǿb ģřǿẅțħ įň țħě Ų.Ș. ħǻș běěň șțřǿňģ ǿvěř țħě pǻșț șěvěřǻŀ mǿňțħș, țħě ħǿųșįňģ mǻřķěț ħǻș běěň mįxěđ ǻňđ čǿňșųměřș ħǻvě șħǿẅň čǻųțįǿň. Ẅħįŀě țħě ǻģįňģ bųŀŀ mǻřķěț įș ǿffěřįňģ șŀįm pįčķįňģș, ěqųįțįěș ǻřě ěxpěčțěđ țǿ ẅįțħșțǻňđ ģěǿpǿŀįțįčǻŀ čǿňčěřňș. Řųșșěŀŀ İňvěșțměňțș' Șțěpħěň Ẅǿǿđ ěxpŀǻįňș ẅħỳ. Pħǿțǿ: Ģěțțỳ “Țħě Ų.Ș. fǿř ňǿẅ įș ģřǿẅįňģ ǿň įțș ǿẅň,......

Words: 1588 - Pages: 7

Free Essay

Term

...SAN FRANCISCO (MarketWatch) — Facebook Inc. isn’t the only social-media company marking the anniversary of its public trading debut this week. LinkedIn Corp. LNKD, +0.36% will celebrate the second anniversary of its initial public offering on Sunday, a day after Facebook FB, -1.53% marks its first birthday as a public company. In LinkedIn’s case, “celebrate” is the appropriate word. “LinkedIn has been the belle of the social IPO ball,” analyst Roger Kay of Endpoint Technologies Associates told MarketWatch. While it didn’t attract the pop culture frenzy that Facebook enjoyed, the LinkedIn IPO will be remembered as one of the most successful social-media trading debuts in history. LinkedIn shares edged up by a fraction to close at $182.35 on Friday. That’s roughly four times their IPO price of $45. When it debuted on May 19, 2011, the stock more than doubled to close at $94.25. On the other hand, Facebook ended its debut trading day with a gain of 23 cents. LinkedIn’s debut was supposed to be just the first wave of social-media IPOs that was expected to reach a high point with Facebook. LinkedIn didn't just have a far more successful trading debut, it has maintained a solid momentum. ‘LinkedIn has tapped into a core set of jobs that professionals want to get done around managing your professional network, looking for a new job, refining your skills. They kind of disrupted the Rolodex.’ Crawford Del Prete, IDC analyst LinkedIn has more than......

Words: 1057 - Pages: 5

Premium Essay

Global Oil Trends

...where new drilling and extraction technology has unlocked vast new reservoirs of crude oil and natural gas. The article I have chosen is from The Wall Street Journal. It was published October 31, 2013 and written by Costas Paris. It is titled “Energy Boom Drives Demand for Tankers; Rising North American Exports Lead to Shipbuilding Frenzy.” Costas Paris is a senior correspondent in the London bureau of The Wall Street Journal. He specializes on global logistics, demands of goods, and supply trends. He joined the Journal back in 2011 and has since covered global shipping, ports and logistics. He has been a journalist since 1987, reporting news and covering stories for a News Reporter from 1987 to 2000. Afterword, becoming Bureau Chief of Dow Jones Newswires from 2008 to 2011. And now, reporting for The Wall Street Journal. In the article, he writes about the implications the energy boom has had on the transforming product-tanker shipping demand. Shipping operators and investors are spending billions of dollars into building new oceangoing tankers to transport diesel, gasoline and aviation fuel, scrambling to keep up with North America's energy boom. Due to energy boom, cost and expenses in refineries have dropped substantially, creating a pro-growth environment. Profits are risings, investment levels are high, and demand is growing rapidly, thus creating a perfect economic scenario for any energy company. A perfect example would...

Words: 639 - Pages: 3

Free Essay

Trading and Exchange

...Assignment no 2 | Fundamental And Technical Analysis of Dow Jones | Trading and Exchange | | Submitted by Muhammad Suleman Usama Khan | Reg # L1S14MBAM0041 | Submitted To: Sir Nizam Feroz | Introduction: The Dow Jones Industrial Average is also called the Industrial Average, the Dow 30, or simply the Dow market, is a stock market index. The industrial average was first calculated on May 26, 1896. Currently owned by S&P Dow Jones Indices, which is majority owned by McGraw-Hill Financial, it is the most notable of the Dow Averages, of which the first (non-industrial) was first published on February 16, 1885. It is an index that shows how 30 large publicly owned companies based in the United States have traded during a standard trading session in the stock market. 6-july-2015 Explanation: On 6-july-2015 the trend in the US-30 or Dow Jones industrial was bearish which shows that market’s closing was at low than its opening (i.e. open at 17,728.08 and close at 17,683.58). During the day the stock traded at highest price of 17,734.36 and the lowest price was about 17,564.36 The market was bearish because most of the performers went worst. The worst performers of the session were Cater pillar Inc. (CAT), Chevron corporation (CVX), General electric (GE) etc. Except of bad performers the companies which outperform during the day were Apple Inc., American Express Company, and The Boeing etc. News released on 6-july-2015 was about one of the......

Words: 1651 - Pages: 7

Premium Essay

Momentum Trading Strategy

...the return of a security is explained by 3 factors: market returns, sizes of firm and book values of firm : However, the model was unable to predict some market anomalies and a student of Fama’s found that adding a momentum factor helped to better predict these anomalies. While a momentum factor helps to explain the returns observed in the market, it also implies that markets are not efficient in any form. If that’s the case, then it should be possible to generate returns with a technical trading strategy on stocks that are significantly correlated with the momentum factor. Strategy Implementation Stock Screening We chose the firms within the Dow Jones Industrial 30 as our stock universe and traded all securities that are significantly correlated with the Fama-French Carhart Momentum Factor. The Dow 30 consists of high quality, highly liquid large cap stocks. Their liquidity characteristic increases the likelihood that “herding” will be observed and reduces the impact of entering and exiting positions. We gathered all the returns from 2010-2014 for these 30 companies including American Express, Dupont and Goldman Sachs and data of the four factors from 2010-2014. We ran simple linear regressions of daily stock returns within one calendar year against the daily metrics of the four factors and selected the companies that were significantly correlated with the...

Words: 1480 - Pages: 6

Premium Essay

Money Business

...and sell shares in the stock market. This is called a secondary market. The money changing hands does not go to the company. A company is worth whatever the total of it's stock is currently worth. So the company has to show that it has good products and services and that they are earning revenue and profits. If the company is not growing properly then people want to sell the stock and the traded price goes down. If the company is doing well then more people want the stock and the price goes. What do you mean by both titles. There are so many companies that offer stock. There are several exchanges or stock markets. The New York Stock Exchange. Since there are so many companies someone invested the Dow Jones Industrial Average. Certain companies are in it and the Dow Jones company has a formula for determining the number. If the number goes up the companies in the DJIA are more valuable. When you hold stock that is an asset. You paid cash for it. When you sell it is when you realize the value. Companies and government also sell bonds to raise money for there organization. You buy the bond and when matures you hopefully get your money back with interest. You can trade the bond. As an investor you can also invest in real estate. The characteristics of the parcel and what is built on the property determines the value of the property. Maybe the land is for farming. Some companies are privately held; they don't raise money on the stock market. The company has......

Words: 352 - Pages: 2

Free Essay

Ceo Leader Admired

...from the consumer. He was passionate about his products and its quality. Jobs never released a product that he felt was inferior in any way. He knew his vision and his success come from the clear understanding and following of the vision (Young Entrepreneur Council, 2013). His vision and direction really helped the company sustain a competitive advantage. It became clear in the stock market that people believed not necessarily in the company but rather in the Jobs visionary leadership. When Jobs would take a sabbatical, the stock would drop and when he would return, stock rose (Wearden, G, 2011). Jack Welch Jack Welch was the CEO of General Electric (GE) for 21 years. GE is the only company that was listed in the original Dow Jones index that remains today (GE, 2014, para 3). Today, it operates in more...

Words: 800 - Pages: 4

Premium Essay

Investment Banking Analysis

...earnings before interest, taxes, depreciation and amortization of $104 million in 2013. The shares, which traded as high as 31 times annual sales...Reducing its multiple from 22 times annual sales now to that level by 2014 would require... To bring its price-sales ratio in line with the Dow Jones Internet Services Index multiple of 3.7... More than 30 million shares changed hands the first day of trading, 3.8 times the amount sold to the public...About 85.7 million shares owned by insiders and money managers start to become eligible for trading 180 days after the IPO. ...is probably able to convert about 15 percent of its sales into EBITDA, and may generate $680 million in revenue next year... While it trades for a higher price-to-sales ratio than its peers, it’s also growing faster. MySocialMedia’s valuation of 22 times sales compares with an average of 9.2 times estimated 2012 revenue at Web business software companies... ...a comeback in venture-capital IPOs propelled MySocialMedia.com to a high of $122 in its first day of trading from an initial price of $45. With a market value of $8.4 billion, the company must boost revenue to bring its price-sales ratio in line with the Dow Jones Internet Services Index by 2014... As an equity analyst, using the materials covered in MSF 535 and the news clippings presented above, provide a maximum of a three page analysis of MySocialMedia.com for your...

Words: 272 - Pages: 2

Free Essay

Dwn Jones

...Rusul Meften, Dec- 2-2015 The Dow Jones Average 1. On May 26, 1896 for the first time an average consisting entirely of 12 industrial stocks is published. To see the list of these 12 companies (as well as all such lists from 1896 to the present),. On October 4, 1916 it was calculated on the stock prices of 20 companies and finally on October 1, 1928 it was increased to 30 companies, the same number as it is today. 2. A stock exchange based in New York City, which is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities. A market index tracks the performance of a specific "basket" of stocks considered to represent a particular market or sector of the U.S. stock market or the economy. There are indices for almost every conceivable sector of the economy and stock market. Many investors are familiar with these indices through index funds and exchange-traded funds whose investment objectives are to track the performance of a particular index. 3. The Dow Jones Industrial Average is important to investors because it is a model for investment products. The Dow Jones Company licenses its index for the creation of mutual funds, exchange traded funds and futures investments. These products trade not only on the U.S. exchanges, but also on international exchanges in Tokyo, London and Toronto. This gives the DJIA added significance for investors worldwide. Also The Dow Jones is important to investors because......

Words: 293 - Pages: 2

Premium Essay

International Stock Market Indexes

...The number of international stock market indexes is . quite large. For many of us, the level of the Dow or . the S&P 500 is known. How about the Nikkei 225? Or . the FTSE 100? Do you know what countries these . represent? ------------------------------------------------- Types of indices Stock market indices may be classed in many ways. A 'world' or 'global' stock market index includes (typically large) companies without regard for where they are domiciled or traded. Two examples are and S&P Global 100. A 'national' index represents the performance of the stock market of a given nation—and by proxy, reflects investor sentiment on the state of its economy. The most regularly quoted market indices are national indices composed of the stocks of large companies listed on a nation's largest stock exchanges, such as the American S&P 500, the Japanese Nikkei 225, and the British FTSE 100. Other indices may be regional, such as the FTSE Developed Europe Index or the FTSE Developed Asia Pacific Index. The concept may be extended well beyond an exchange. The Wilshire 5000 Index, the original total market index, represents the stocks of nearly every publicly traded company in the United States, including all U.S. stocks traded on the New York Stock Exchange (but not ADRs or limited partnerships), NASDAQ and American Stock Exchange. Russell Investment Group added to the family of indices by launching the Russel Global Index. More specialized......

Words: 5657 - Pages: 23

Premium Essay

Stock Market Analysis

...company and the potential of gains based on the company's future performance. Buyers and sellers come together to trade during specific hours on business days. Exchanges impose rules and regulations on the firms and brokers that are involved with them. If a particular company is traded on an exchange, it is referred to as "listed". Companies that are not listed on a stock exchange are sold OTC (short for Over-The-Counter). Companies that have shares traded OTC are usually smaller and riskier because they do not meet the requirements to be listed on a stock exchange. Stock Market Evaluation There are three major indexes to evaluate the overall performance of the stock market. These indices are discussed in more detail below: The Dow Jones The Dow Jones Industrial Average (DJI) is one of the oldest, most well-known and most frequently used indexes in the world. It includes the stocks of 30 of the world's largest and most influential companies. The DJI is what's known as a price weighted index. It was originally computed by adding up the per-share price of the stocks of each company in the index and dividing this sum by the number of companies. This is why it's called an average. Unfortunately, it is no longer this simple to calculate. Over the years, stock splits, spin-offs and other events have resulted in changes in the divisor, making it a very small number (investorguide). The DJI represents about a...

Words: 1285 - Pages: 6

Premium Essay

Largest Stock Exchange

...10 Largest Stock Exchanges from Asia, Europe, Africa and America: 1. Asia: i. Bombay Stock Exchange: The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE SENSEX in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading SENSEX futures contracts. The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. The equity market capitalization of the companies listed on the BSE was US$1 trillion as of December 2011, making it the 6th largest stock exchange in Asia and the 14th largest in the world.[1] The BSE has the largest number of listed companies in the world. As of December 2011, there are over 5,112 listed Indian companies and over 8,196 scrips on the stock exchange,[3] the Bombay Stock Exchange has a significant trading......

Words: 5456 - Pages: 22