Why the stock market may be overvalued
The Dow Jones Industrial Average closed down 1.6% Friday on a broad rebound in corporate earnings that may have helped push investors to invest more in the stock markets.
Analysts say the recovery from the worst recession since the Great Depression is now starting to turn around.
Wall Street’s rally, however, was short-lived.
Analyzing the recent moves in the market, The Wall St. Journal’s Mark Halperin and Robert Zirkelbach say the Dow could be undervalued.
Read more from the WSJ.
Read more from The Wall STJ: The Dow is now undervalued for the second time in three years.
In May, the Dow lost 5% to 4,923.50, but the gain was made possible by a surge in new orders, which were also buoyed by new technology.
Analyzes of the Dow’s latest quarterly earnings report have said it should have lost even more.
The recent earnings reports of Amazon and Apple, as well as earnings from Microsoft, Netflix, and Alphabet, are likely to boost stocks even more, said Mark Zandi, chief investment officer of Wells Fargo & Hayes &.
Bacon &.; Weinberg.
The S&P 500 also rose for a second straight day.
The Dow Jones industrial average, which measures the performance of the broadest range of companies, closed at 21,945.15.
The Nasdaq composite index, which tracks the broader market, closed up 1.3%.