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Is the year high in for the Dow?

Lawrence Lewitinn
Talking Numbers
Is the year high in for the Dow?

Will the Dow continue to drop or is there some hope?

It’s been over a month since the Dow Jones Industrial Average index reached its record high of 15,658.43. Will it continue to drop or is there some hope?

From January 1 to August, 2, the Dow was up 19.5%. Since that time, the Dow has fallen more than 4%. Simultaneously, yields on the benchmark US 10-Year Treasury bond have gone from 2.74% to 2.9%. That may not sound like much but that’s a 6% increase in borrowing costs.

(Read: Stocks higher for second session, Dow bounces 100; Apple at $500)

Helping to pull the Dow down is Hewlett-Packard, the worst performing stock in the 30-company index. HP is off by nearly 15% since August 2. Even though financials have been doing well this year overall, they have also taken the biggest hit since the August peak. Banking giant JP Morgan Chase, a Dow component, is down 8% this month.

Statistically speaking, September is the worst month for the Dow Jones Industrial Average. Since 1950, the Dow has closed down 60% of the time. Since the Great Depression, September has averaged a loss of 1.31% in the index.

(Watch: Europe shares close higher on US gains; airlines drop)

So, what can we expect in the index? Looking at the fundamentals of the markets is CNBC contributor Gina Sanchez, founder of Chantico Global. On the charts is Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson.

What’s next for the Dow? Watch the video above to see Sanchez and Ross analyze the index.


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