Archive for April, 2007

Dow 14,000?

Monday, April 30th, 2007

Jim Cramer was on the Chris Matthews Show this week and mentioned that he expects the Dow to rise an additional 10% within the next 6 months.

That would put the Dow at almost 14,500 by year’s end, which seems like a pipe dream to those of us who’ve been watching the US economy flounder in comparison to overseas investments.
Or is it?

Cramer’s assertation that it is the BRICs that are leading the world is right on target, and it’s important to point out that the Dow 30 is heavily weighted with companies that do a lot of business overseas. By some estimates, 40% of revenues from companies in the Dow come from Europe, Asia and Emerging Markets.

For that reason alone, it’s reasonable to assume that the Dow will break away from the S&P 500 in performance this year, and in the years to come. Big hitters like Alcoa and Boeing can expect big numbers from developing economies that will need their products.

Dow 13,000

Wednesday, April 25th, 2007

The Dow Jones Industrial Average closed above 13,000 and nearly breached 13,100 in late trading Wednesday.

Exxon Mobile (XOM) announced an incread of its quarterly dividend to $0.35 from $0.32, and Alcoa (AA) announced that it is exploring the sale of its packaging and consumer units.

Outside the Dow, the tech sector also showed strength, with shares of Amazon (AMZN) rising over 25% to $56.81 after announcing profits doubled on strong sales growth. Sun Microsystems (SUNW), however, fell short of analyst expectations and dropped over 11%.

The Commerce Department announced that demand for durable goods rose 3.4% in March, paving the way for the rally.

Recent weakness in the US Dollar has also helped many of the Dow components, which collectively gross 40% of their revenues from overseas.