Stock Market This Week
Stock Market This Week – 03/02/24
The Dow Jones Industrial Average has changed significantly since its inception in 1896. Although it now consists of 30 stocks, the initial version contained only 12. The index added another eight companies in 1916, making the total 20. In 1928, the number rose to 30, but none of these companies are still on the list.
The Dow recently changed again because Walmart conducted a 3-to-1 stock split. The split makes the share inexpensive for its workforce, who purchase shares through Walmart’s employee stock plan.
However, because the Dow 30 is price-weighted, this split will reduce Walmart’s weight in the index. Further, it causes a change in the Dow Divisor.
Consequently, the S&P Dow Jones announced that Amazon.com (AMZN) will be added to the index, replacing Walgreens Boots Alliance (WBA), the pharmacy retailer, which is struggling, and the share price has declined substantially.
At the same time, Uber Technologies (UBER) will replace JetBlue Airways (JBLU), whose stock price is in the single digits.
As a result, the DJIA now has more technology companies than ever before.
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Stock Market Overview
Data from Stock Rover* showed yet another mixed week for the stock market. The Russell 2000, the Nasdaq Composite, and the S&P 500 Index all had positive returns. The Dow Jones Industrial Average (DJIA) was the only index down for the week.
Nine of the 11 sectors had positive returns this week. The Technology, Consumer Cyclical, and Real Estate sectors were top performers. However, the Consumer Defensive, Utilities, and Healthcare sectors were the worst performers.
Oil prices rose to ~$79.81. The VIX was down to 13.17, which is still well below its long-term average. Gold ended the week at ~$2,092 per ounce.
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![Stock Market Returns This Week](https://www.dividendpower.org/wp-content/uploads/2024/03/Stock-Market-Returns-This-Week.png)
The markets continue to move upward due to the economy’s strength and continuation of the bull market. The Nasdaq leads the way, followed by the S&P 500, the DJIA, and the Russell 2000. Nine of the 11 sectors have positive returns. The top performers in 2024 have been Communication Services, Technology, and Healthcare, while the Basic Materials, Utilities, and Real Estate sectors are trailing.
![YTD Stock Market Returns](https://www.dividendpower.org/wp-content/uploads/2024/03/YTD-Stock-Market-Returns.png)
![YTD Stock Market Returns](https://www.dividendpower.org/wp-content/uploads/2024/03/YTD-Stock-Market-Returns.png)
The dividend growth investing strategy started the year down. Larger market capitalization stocks are performing better than smaller ones. The table below shows their performance by category. However, dividends and passive income streams continue to grow.
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Stock Market Valuation This Week
The S&P 500 Index trades at a price-to-earnings ratio of 27.88X, and the Schiller P/E Ratio is about 34.58X. These multiples are based on trailing twelve months (TTM) earnings.
The long-term means of these two ratios are approximately 16X and 17X, respectively.
Despite the recent correction, bear market, and rebound, the market is still overvalued. Based on historical data, earnings multiples of more than 30X are overvalued.
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.