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"Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis."
So begins the intro to every article in the Fool's "10% Promise" series. When your stock goes kerplunk -- or kapow! -- our commitment to you is to answer the recurrent question: "What the heck just happened to my stock?"
Sometimes, though, there's more behind a stock's movement than individual events. Sometimes, the entire market just decides to take a great leap forward, or a doozy of a step down. Today was one of those days.
According to the market heat map put together by the friendly data crunchers at finviz.com, pretty much everybody who's anybody in stocks went up today. Financials scored the strongest gain. Stocks associated with that industry on the S&P 500 outperformed the tech stocks by a good 60 basis points, rising 4.3% on average. Tech itself was, of course, second, with a 3.7% average gain, followed by companies producing basic materials, utilities, and services.
Industrial and consumer-goods companies lagged behind these industries, suggesting that some concerns remain about the strength of the U.S. consumer -- and the strength of U.S. businesses as well. Meanwhile, safe-haven stocks in the health-care and conglomerates sectors performed poorest of all, rising just 2.3% and 2.0% respectively. Hey -- the time to seek safe havens is when a storm's brewing. On a day like today, with all skies clear, the ports clear out, and investors race for the high seas.
As for actual losers -- you might be surprised to hear this, but out of the entire 500-company S&P index, a grand total of only two stocks lost value today: Sprint Nextel (NYSE: S ) and Sara Lee (NYSE: SLE ) . Sprint is apparently facing the prospect of having to come up with a sizeable investment to keep partner Clearwire afloat. Sara Lee suffers from the more mundane difficulty of having just reported disappointing earnings ($0.19 per share if you're curious -- about 32% less than last year).
So why did the market decide to leap forwardrather than drop downward today? Lots of pundits will be going on CNBC tonight to tell you the answer. I'm sure Cramer will have a few theories of his own to toss out between chaingun-rattle and bullhorn-blowing sound effects. (Some of his observationsmight even be internally consistent.)
Others will tell you the U.S. unemployment data saved the day. Government statisticians told us the lines at the welfare office were 7,000 people shorter this week than last. Today was the first time we got an unemployment claims number below 400,000 since April -- certainly cause for rejoicing. Other investors were probably pleased to see French President Nicolas Sarkozy and German Chancellor Angela Merkel get together for a powwow on how to fix Greece, shore up Italy, and help France avoid an S&P downgrade.
Heck, even fundamentals probably played a role. When Cisco Systems (Nasdaq: CSCO ) confirmed that rumors of its death had been greatly exaggerated, that was certainly cause for investors to cheer. Elsewhere, we saw ATP Oil & Gas (Nasdaq: ATPG ) pop when an analyst from Rodman & Renshaw pooh-poohed the risk of a bankruptcy filing. Battery maker A123 Systems (Nasdaq: AONE ) landed a big supply contract with General Motors (NYSE: GM ) . And beleaguered News Corp. (Nasdaq: NWSA ) reminded investors that it doesn't know how to just hack phones -- it can earn a profit as well!
When you get right down to it, could the market's move today indicate that the worst is now over and the Dow's ready to start climbing? Yes. Or could it be the calm before the storm, a brief tick up before the next leg down? Also yes.
Either theory's a possibility, and don't let the pundits tell you any different. They don't know any more than you do -- or than I do, for that matter. What I do know is that things are still not good out there in the world. Open any newspaper, and you'll see what I mean. There's trouble in Europe. Trouble in the United States. Turmoil in the Middle East. Plenty of reason for stocks to go down again -- and plenty of opportunities for them to rise as problems get resolved.
Recognizing that, we're going to keep doing what we do here at the Fool: keeping an eye on things for you, and pointing out bargains as we find them -- tomorrow, the next day, and the day after that, for as long as you want to keep reading.