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PRESS RELEASE

CONTACT: DR. BRIAN HILL                                                   FOR IMMEDIATE RELEASE

PHONE: 773.221.7801                                                          DATE:  JANUARY 27, 2011

EMAIL: bhill@hillfoodserviceconsulting.com

PRESS RELEASE #003

The Significance of the Dow Jones

CHICAGO, ILLINOIS On Wednesday, January 26, 2011 the Dow Jones Industrial average topped the 12,000 mark for the first time since June, 2008 before retreating and closing at 11, 985.  While there are many factors which influence this, analysts believe that a major factor was the promise of President Obama to revamp the tax corporate tax codes, and not so much by the recent meeting of the Fed, which seems to nearly always affect stock performance.  Such news brings waves of excitement to the market because it possibly means more on-paper profit.  The excitement causes more purchasing of stocks, leading to upward movement.  This is a significant milestone for a few reasons.

First, the Industrials are the 30 major companies that make up the main Dow average.  Therefore, the constant upward trend of late indicates that there is more market cap, especially where these companies are concerned.  What this means is that more money is being invested into these companies and more shares traded by investors, with “buying” outweighing “selling.”  More money means that companies can expand, spend more, and hire more.  In theory, this is an economic boost.  While there were a few of the big companies whose stocks dropped on this day, the overall trend has been upward.

Second, the amount of trading being done means that there is less fear of volatility and more investing. When the mood of investors is one of confidence, the companies with the most money are not afraid to make the types of changes listed above.

Third, this also indicates some form of confidence in the leadership of our country. Whether we agree or not, when the confidence level of citizens is up where leadership is concerned, the country as a whole is viewed as stronger, not only by its citizens, but more importantly abroad. This in turn may have a positive effect on the global markets, i.e. the Hang Seng (China) Index, and the Nikkei 225 (Japan) Index. There are other markets which may invariably be affected, but the point is that the U.S. markets affect the world.

While we know these things to be such, analysts frequently downplay the significance of such milestones. This is perhaps so as not to cause panic and retreat for one. Also, if the market turns, it can always be said that such was the reason there was no importance placed on the milestone.

This view is opinionated and simplistic. It is not based on the scientific data available, but rather empirical evidence and observation.

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