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Dow looks to avoid a four-day swoon

The Dow Jones industrial average is in danger of doing something that it hasn’t done since late March: finish down four straight sessions. But that’s exactly where the blue-chip stock gauge, home to such iconic companies as Apple and Coca-Cola, stands heading into today’s trading session. In pre-market futures trading, the Dow is down 23 points, or 0.13%.USA - Business - Dow Jones Sign

The Dow has been in a bit of a funk ever since last Thursday, when investors started worrying about the possibility of a stronger-than-expected reading on May job growth, and coming interest rate hikes. And those fears were realized Friday when the government said the economy created 280,000 jobs last month, a sizable 60,000 above consensus. The fear, of course, is that good news on the economy doesn’t necessarily mean good news for the stock market.

While that may sound counterintuitive, it’s really not. The reason Wall Street doesn’t greet strong economic numbers with open arms is because that could mean the Federal Reserve will move this fall to boost interest rates for the first time in nearly 10 years. Low borrowing costs, of course, have been cited as the main driver of the bull market that began in early 2009. Rising rates also put pressure on price-to-earnings ratios, which are now above their historical average, which means the market is a tad overvalued.

The good news? The Dow’s declines in this three-session skid have been relatively contained, with the point drops in days 2 and 3 smaller than Day 1. The Dow fell 171 points Thursday, 56 points Friday and another 83 points Monday. The blue-chip Dow kicks off today’s session in the red for the year. After yesterday’s drop, the Dow is down 0.3% in 2015 and 3% off its May 19 record closing high of 18,312.39. Still, angst may grow if the Dow’s winless streak stretches to four days. The last time it was down that many days was a four-day span from March 23 to March 26.