October: Dow industrials record their biggest monthly gain in four years

US stocks rose the highest for monthly gains in October, the largest of such monthly logs within the past four years. The Dow Jones industrial recorded a perfect rise of 8.5%, and this gain is attributable to global stocks which have started to rebound.

Market analysts say the gains recorded in the stock market is largely due to the fact that central banks around the world have activated economic stimulus to help national economies recover from the inflation and growth, and the action has also helped to boost monetary policies where lagging interest rate rises would have been detrimental.
Meanwhile, traders and investors confidence in the markets were buoyed because of the positive quarterly results posted by many large companies.

For instance, S&P 500 grew 8.3% in October and the STOXX Europe 600 stocks rose by 8% – the largest of such monthly gains since July 2009. Also, the Nikkei Stock Average of Japan climbed by 9.7%, the largest of such monthly recording since April 2013.

But it was not all great news this past week. Dow dropped by 0.5% to record 17663.54 while the S&P 500 slipped 10.05 points to obtain 2079.36 – because the influence of larger financial organizations worked out ill for the losers. The Nasdaq Composite edge also dropped 0.4% to reach 5053.75 while most of the stocks in Asia dropped, including the Stoxx Europe 600 which slipped by 0.1% on Friday.

David Lyon, a global investment specialist in San Francisco for JP Morgan Private Bank noted that the monthly gain recorded for October was impressive and good, adding that the weakness that was generated in August and September was largely because China’s economy was weakening, and concerns about whether the Fed was going to raise interest rates.

Meanwhile, the stocks of larger companies did well above those of smaller companies during the last shares run. From the beginning of this year till mid-August, just before the shares of various companies began to diddle, stocks of S&P 500 was up to 2.1% in comparison to the 1.7% gain made by Russell 2000 index of small companies’ shares.

To this extent, from middle of August till Friday when the market closed, the index of S7P 500 diverged greatly from that of Russell 2000 which lost 5.2% against the former which slipped by 1.1%.