Major U.S. equity benchmarks finished 2014 in the green, extending a lengthy bull market, but the last few days of trading were nothing to write home about. With Wednesday’s 1% loss, the S&P 500 turned negative for December while the Dow Jones Industrial Average is off 1.3% over the past week.
For all its flaws, namely the weighting methodology that makes the highest-priced stocks its biggest component, the Dow is still a widely followed index and the SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) is still a $13.1 billion ETF. [Danger for the Dow ETF]
The Dow and DIA finished 2014 on a three-day losing streak, just the seventh time the blue chip index completed a year on a three-day skid. For investors considering a stake in DIA, the Dow’s previous year-end three-day slides are merit examination.
“As shown, back in 2005 (following 2004’s three-day losing streak to end the year), the Dow traded down to start the new year, and it ended the year in the red as well. Overall, though, the Dow has gained on the first trading day of the new year in four of six instances, and it has been up 4 of 6 times over the first three trading days as well,” according to Bespoke Investment Group.