Dow Jones Makes Further Declines On Weak Payrolls Data
The Dow Jones Index made further declines at the end of this week closing on Friday near 100 points down at 12,151.26. The Non Farm Payrolls report showed the weakest growth in jobs since last September and a rise of 0.1% in unemployment since April. This triggered heavy selling early in the day across the US markets.
The major US indexes are now trading around their six week lows, testing the resilience of investors hoping for further growth moving into the second half of 2011. There are however calls from major fund managers that the markets have now priced in any economic uncertainty and should not print lower prices unless there is some sort of “shock to the system”.
Jim McDonald, chief investment strategist at Northern Trust Global Investments commented, “We don’t see material downside from here, a five percent correction is appropriate for the slowdown we’re experiencing, and over the intermediate term, our expectation is that we’ll regain some momentum”.
Technical traders were watching the April lows, with a view that when broken the index 200 day moving average could be tested. Holding above this level will be considered bullish in the longer term, and thoughts are still with the indexes being up on the year with the Dow Jones currently standing at a 5% increase on 2010 levels. Growth for the year is expected, and the usual strong Autumn months are yet to come.
Analysts see slim chances of a double dip back into recession, and factors such as high energy prices and supply chain disruptions due to the Japan earthquake are just temporary factors in holding back growth.
About Pete Southern
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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