ISEQ: Up or down? - The Stockmarket Thread


#5561

Dow up 221 pnts at 12351


#5562

Dow down 250pnts at 12,574 yo yo stuff


#5563

Why do people pay so much attention to the Dow? I would have thought the S&P was a better bell weather!


#5564

Because people pay so much attention to the Dow :smiley:


#5565

I’d guess it’s because the Dow has been around for over a hundred years, while the S&P only appeared a few decades ago. Financial journalists are an insecure lot; it is much safer to conform to the norms of one’s contemporaries than risk exposing one’s ignorance.


#5566

The Dow, the S&P, the market…its all the same thing.

14 points on the S&P…120 points on the Dow…1% on the market…its all the same thing.

It doesnt matter to anyone that the Index is up or down per se.

It matters that when the market is up, then the stocks you own will be up.

And so what matters then is, how much is the market up…

And you can get that message across by referencing any of the three.

And its easier to say the Dow than the S&P. And it has more tradition.


#5567

The Dow comprises the 30 biggest established stocks, the S&P has the top 500 (approx). There’s a fair bit of correlation between the two of course, but the point stands - using the S&P 500 measure is more accurate and representative of the broader economy.


#5568

In terms of differences, the fact that the Dow is a price index and the S&P is a market weighted one is a bigger difference in terms of return differential.

its underplaying it to say there is a ‘fair’ degree of correlation. There is a very high degree of correlation. So much so that on a day to day basis, its almost the same. The divergence in performance only comes into play over a long period, a year or three years. On a day to day basis, they rarely diverge by a significant amount.

Also, the S&P500 has the 500 largest stocks. The S&P100 has the 100 largest stocks. Need to specifiy which S&P index you are talking about. Less need to do that with the Dow.


#5569

All of which leads me back to my original point - that the S&P is a more correct measure, but the differences between the two are too complicated/inconsequential to cause the general consensus of journalists and analysts to switch. And there isn’t any need to specify which index you are talking about - everyone knows that the “S&P” refers to the “S&P 500”. The same way as the “Dow” means the “Dow Jones Industrial Average” and not the “Dow Jones Transportion Average”.

Ok now I’m boring myself…
:blush:


#5570

On this point…

Why do you suggest that the stock market is representative of the broader economy…thats a tricky statement to defend.


#5571

**More representative than the “Dow” ** ?? -c’mon - ? The point is that the S&P is more representative of the equity market than the “Dow” - Apple isn’t even in the DJIA…

  • there’s more that one Dow Jones Index too - the S&P 500 is cited far more often in the Financial media and it also has the most widely traded future -

cmegroup.com/trading/equity- … dp500.html
E-mini S&P 500 (Dollar) volume : 1,020,472

cmegroup.com/trading/equity- … i-dow.html
E-mini Dow ($5) Future volume: 86,974


#5572

My statement was that the S&P was more representative of the broader economy than the Dow (because it covers a wider range of companies and industries).


#5573

And I suppose thats the basis of my original question/statement, that the S&P500 gives an aggregate market value of companies in the broader economy. The Russell2000 is another interesting market to watch for the same reasons. Anyway the S&P and the Russell performed roughly 4% better return than the Dow so far this year.


#5574

www.ft.com/cms/s/0/df98b6ce-0406-11e2-9 … z2700dESJV


#5575

Sink or swim for stock exchange as flotations dry up - Simon Carswell -> irishtimes.com/newspaper/fin … 28403.html

Destined to fall into obscurity once the semi-state selloff is complete?


#5576

Thought I might put this in here, even though it’s a complete non story. A .9% rise that is unlikely to indicate any sort of trend. Yes, back down today.

More to the point, this ‘news’ seems to be something that’s regularly rolled out by a compliant media to give weight to the news that bailout targets are being reached. It is completely trite.

I looked up the journalist, Peter Flanagan. A protege of the likes of Charlie Weston and Brendan Keenan it seems. I’m sure we’ll be hearing more from him as this crisis develops its requirements for more and more stupid propaganda.


#5577

Agreed - it is simply diabolical reporting - possibly even “deliberately misleading”.


#5578

+1. You regularly see such reporting without any indication of the normal level of volatility in a particular index. Same with oil prices – you’ll often see report of a one or two percent gain on reports of “stronger global growth” … omitting to mention that prices have fluctuated by 20% in the last several months, and are down 5% in just the last week or two. It’s nearly as nonsensical as science reporting.


#5579

irishtimes.com/newspaper/bre … ing26.html


#5580

Wall Street returns to hit 5-year high

ft.com/intl/cms/s/0/e9b4549a … z2LMiZMt9d