Tag Archives | Dow Jones

Blue Chip Stocks

See Also:
Preferred Stocks (Preferred Share)
Stocks Firm; Focus on Fed

Blue Chip Stocks Definition

Blue chip stocks are long-established, well-known companies with reliable earning power and growth over time. Following are common characteristics of blue chips:

  • Sell diversified and high quality products and services in a variety of geographic locations
  • Competitive advantage in the market through their reputation and cost efficiencies
  • Steady consumer demand for products and services because they are not affected by changing technology or changing consumer tastes
  • Long-term share price returns
  • Consistent dividend payments to common stock holders with a tendency to increase dividends payable to each share
  • Solid balance sheets with secure assets and minimal debt levels allow them to borrow money at a lower cost than competitors
  • Excellent credit ratings
  • Known to overcome operate profitability in economic downturns
  • Large and steady revenue streams and market capitalization

Benefits of Owning Blue Chip Stocks

Blue chip stocks can be some of the best investments in the market because they provide consistent dividend payments and long-term price returns. While many consider blue chips as boring and outdated, these stocks have consistently demonstrated growth and profits.

The Dow Jones Industrial Average

The Dow Jones Industrial Average provides a list of the thirty most prestigious blue chip companies around the world. Editors of the Wall Street Journal analyze and select the list of blue chips for the Dow Jones. This list rarely changes because of the stability of blue chip stocks.

How to Invest in Blue Chip Stocks

Investors can purchase blue chip stock investments through any one of the following:

Examples of Blue Chip Stocks

Some examples of blue chip stocks include the following:

  • Coca-Cola
  • Johnson & Johnson
  • General Electric
  • General Mills

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Blue Chip Stocks

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Blue Chip Stocks

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New York Stock Exchange (NYSE)

See Also:
National Stock Exchange of India (NSE)
Proprietary Trading
Coupon Rate Bond
Currency Exchange Rates

New York Stock Exchange (NYSE) Definition

Located in New York City, the New York Stock Exchange is the world’s largest exchange according to its market capitalization around $12.5 million. It is an exchange for financial items like stocks, bonds, currency, etc.

New York Stock Exchange (NYSE) Meaning

The NYSE exchange was founded in the year 1817 to ease the exchange for transactions. This stock exchange contains several different indexes like the Dow Jones Industrial Average and the NYSE composite. The NYSE composite is not as widely used, but the Dow Jones is considered one of the leading indicators of how well the market is doing as a whole. This is because the Dow Jones measures how well some of the largest companies in the world are performing. In order to stay current with the NASDAQ and grow internationally, the New York Stock Exchange (NYSE) acquired Archipelago in 2005, and then went into a merger with Euronext in early 2007. These two moves brought the NYSE up to date with electronic trading and it also established the NYSE as a world player.

New york stock exchange

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Fed Lowers Rate Target – Time to Pop the Cork?

Yesterday afternoon, the Federal Open Market Committee did what nobody expected. The Fed lowers rate target. If you paid any attention to published reports, then they acknowledged what was already priced in by the futures markets and lowered its target for the federal funds rate by 50 basis points to 4.75%. While US equity markets reacted favorably to the news, with the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 indices all up on the news today, it is unclear as to whether this is a sign of good things to come, as the equity market reaction seems to suggest, or merely an attempt to forestall an inevitable slowdown of the US economy. The Fed, for its part, couched its change as a response to the current troubles. They have hit the credit markets, in particular mortgage lending:

“Economic growth was moderate during the first half of the year, but the tightening of credit conditions has the potential to intensify the housing correction and to restrain economic growth more generally. Today’s action [intends] to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time.”

FOMC Statement September 18, 2007

Fed Lowers Rate Target Conclusion

It certainly seems that the Fed is responding to pressure from the financial community. The financial community wants them to ease its monetary policy in the face of increasing difficulties in the credit markets. In addition, they want them to help those who recently financed their home purchase with an adjustable rate mortgage. Needless to say, this is probably not good news for the US dollar. As a result, the dollar continues to depreciate in value relative to other major currencies. After reading the FOMC statement, we realized there may be a rougher patch ahead.

Fed Lowers Rate Target

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