Dow Jones index falls over 400 points amidst rising US-China tensions

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Dow Jones Industrial Average (DJI) or Dow 30 closed at 32,396.17, almost 402.23 points down on August 2, The 1.23% fall in Dow came on the back of rising U.S.-China tensions, as House Speaker Nancy Pelosi reached Taiwan. Other leading indices like S&P 500 and Nasdaq Composite also closed in the red. Dow is lower by 7.75 per cent over the 1-year while the return since January 2022 is a negative 10.85 per cent. Dow continued to trade in a small range of 32,387.12 and 32,772.93 during the day’s session. The 52-week range for Dow remains between 29,653.29 and 36,952.65.

Only four prominent Dow stocks – Salesforce Inc., Travelers Cos. Inc., Walmart Inc. and UnitedHealth Group Inc.– were in green when the market closed. Arista Networks (ANET), Caterpillar (CAT), CF Industries (CF), Devon Energy (DVN), Diamondback Energy (FANG), Mosaic (MOS) and Uber Technologies (UBER) were other stocks in focus on Tuesday.

Caterpillar Inc. (NYSE: CAT) announced second-quarter 2022 sales and revenues of $14.2 billion, an 11% increase compared with $12.9 billion in the second quarter of 2021. CAT ended the day’s session 5.82 per cent lower settling at $183.51.

Dow is a popular barometer of the US economy, its businesses and the consumer trends in the country. Part of S&P Dow Jones Indices, Dow 30 index has a diversified exposure to various sectors of the economy except transportation and utilities.

Some of the prominent companies in 30-stocks index are Boeing, Nike, Goldman Sachs, Walmart, Intel, 3M, UnitedHealth Group, Apple, Coca-Cola, McDonalds, Microsoft etc.

The Dow is a price-weighted index that measures the performance of 30 of the largest U.S. Companies. Unlike other indices, in Dow 30, the selection is not governed by quantitative rules but as per the S&P indices website, “a stock is added to the index only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors.” Further, it is to be maintained that the companies are incorporated and headquartered in the U.S with the large part of revenues being generated from the United States.