Why the Dow Rose Today

The Dow Jones Industrial Average (INDEX: ^DJI) rose today as economic releases showed rising home prices in the U.S. and better-than-expected employment data.



Ending Value

Dow Jones Industrial Average

+46.02 [+0.36%]


S&P 500 (INDEX: ^GSPC)

+5.80 [+0.54%]


There were two pieces of economic data today that pushed the Dow up. First, the Federal Housing Finance Agency released data this morning showing that while seasonally adjusted home prices fell 0.1% in the fourth quarter of 2011, they climbed 0.7% in December. Overall in 2011 housing prices fell 2.4%. The market reacted positively to the news, as rising home prices indicate a strengthening U.S. economy.

Second, the Labor Department reported that the level of new seasonally adjusted unemployment insurance claims remained flat at 351,000 after an adjustment of last week's data from 348,000 to 351,000. That remains the lowest level since March 2008, and it was also better than analysts had expected. The average of analyst predictions put the claims level to be 353,000 (lower is better). Widespread unemployment has been a continuous challenge for the U.S. economy the past few years, hitting a high of 10% in October 2009 and slowly improving since then.

It's not all rosy news, though. Weighing down the Dow today was Hewlett-Packard's (NYS: HPQ) poor earnings. HP finished the day down 6.54% to $27.05 after reporting earnings per share of $0.73, missing analyst expectations of $0.95. The company also blew it on revenues, reporting just $30 billion versus expectations of $30.7 billion. Fool analyst Evan Niu thinks 2012 is going to be a rough year for Hewlett-Packard.

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At the time thisarticle was published Dan Dzombakholds no position in any company mentioned.Like his Facebook pageto follow his investing articles. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't 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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