Why the Dow Jumped This Week

The Dow Jones Industrial Average (INDEX: ^DJI) rose 1.4% (from 12,019.42 to 12,184.26) this week.

The Dow measures the movements of just 30 leading American companies, but the rest of the market reported a similar story; the S&P 500 (INDEX: ^GSPC) , Nasdaq (INDEX: ^IXIC) , and the Russell 2000 were all up as well.

It's difficult (and usually wrong) to give credit or blame for the complex movements of the market to just one event, but if there's one reason the Dow was up this week, it's some optimism about the European Union's ability to co-operate for the common inter-country good. As the Washington Post reported: "A landmark summit of the 27-nation European Union ended here Friday with both a pledge and wedge: A pledge among nations to work toward a new treaty binding them more closely together in a pact to save the euro, and a wedge between the continent and Britain, which opted to sit it out."

Well, it's a start at least. There will certainly be many more twists and turns to this story.

A more granular view
For the individual stock investors among us, we can also look at the big moves among the stocks that make up the Dow.

The three biggest winners this week:


Stock Price Change

General Electric (NYS: GE)


Pfizer (NYS: PFE)




Source: S&P Capital IQ

GE jumped up Friday as it increased its quarterly dividend from $0.15 to $0.17. Pfizer is up despite having to now (as of Nov. 30) compete with generics for its huge cholesterol drug, Lipitor. Meanwhile, Travelers is using its cash to buy back stock at a greater-than-expected clip.

The three biggest losers:


Stock Price Change

DuPont (NYS: DD)




Caterpillar (NYS: CAT)


Source: S&P Capital IQ

DuPont led the losers because it cut its earnings guidance for 2011. Meanwhile, there wasn't as obvious a reason for Alcoa's drop (besides normal commodities volatility), and Caterpillar is basically flat.

Remember that we're just looking at weekly movements here. It's fun to check in on the news, but at the Motley Fool, we recommend investing for the long term. These weekly price movements are just small blips in the bigger picture.

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At the time thisarticle was published Anand Chokkaveluowns shares of Pfizer.Motley Fool newsletter serviceshave recommended buying shares of Pfizer. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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