Why the Dow Bounced Back Today

Despite holding the second smallest weighting of Dow Jones Industrial Average (INDEX: ^DJI  ) components, the market gleefully welcomed Alcoa's (NYSE: AA  ) earnings beat and gained 0.70% today to snap its longest losing streak since last August. Of course, Alcoa wasn't the only story. Here's what else happened that affected today's market, and what to look forward to for the rest of the week.

Bad reception
Worldwide mobile-phone market leader Nokia (NYSE: NOK  ) lowered first-quarter expectations of its Devices and Services division to a negative 3% operating margin because of "competitive industry dynamics." Its shares dialed in a 15.71% loss for the day. Nokia also announced that it sold 2 million of its Lumia devices in the first quarter that run Microsoft's (Nasdaq: MSFT  ) Windows Phone operating system. Unfortunately, the newest phone model sold, the Lumia 900, had a software glitch that affected data connectivity, and Nokia has offered to let customers exchange phones along with giving them a $100 credit on their AT&T bill. In February, according to comScore, Windows Phone holds a 3.9% market share in the United States.

Spanish and Italian bonds
The yield on Spanish government 10-year bonds fell to 5.87% after hitting a high of 5.98% yesterday, and the Italian 10-year bond yield fell to 5.53%. The rising yields have put fear into markets worldwide of the larger economies following in Greece's rocky path; however, a member of the European Central Bank's executive board, Benoit Coeure, stated that the bank still has another "instrument for intervention."

Dealmaker wants a deal
While Groupon's stock struggles after announcing material weakness in its financial controls, Travelzoo (Nasdaq: TZOO  ) shares took off today, rising almost 30%. Reuters reported that the travel-deal company is planning to sell itself, giving any buyer its 24 million subscribers around the world. Travelzoo closed at $27.06, still considerably down from its 52-week high of $103.80 per share.

Fed's Beige Book lives up to its drab name
Published eight times a year, the Federal Reserve's Beige Book survey collects responses about the economy from key people around the country. The key word from today's report was "modest," with some form of the word appearing 51 times throughout the text. In a close second, at 33 times, were forms of the word "moderate." In short, the report noted that the economy was expanding at a "modest" to "moderate" pace.

A worm peeks its head out of Apple
The Department of Justice announced an antitrust lawsuit against Apple and publishers Macmillan and Penguin over fixing e-book prices. The department believes customers have paid $2 to $3 more per e-book, potentially totaling more than $100 million. Two publishers, HarperCollins and Hachette, have already settled and agreed to pay restitution of $51 million. In Europe, Apple and various publishers hope to settle a similar probe brought by the European Commission. Apple's stock price fell 0.36% to close at $626.20.

Looking forward this week
Tomorrow, the Department of Labor will release its weekly report on initial and continuing jobless claims. In addition, March's Producer Price Index (PPI), a report that measures inflation, will be released tomorrow morning. Core PPI, which excludes price increases of food and energy, is expected to increase 0.2%.

On Friday, JPMorgan Chase will report its first-quarter earnings. The bank is expected to post earnings per share of $1.16, beating last quarter's $0.90 per share. It also recently announced that it will exit the student-loan market, issuing new loans only to the bank's own customers.

Remember, stay Foolish
The market can overreact to any headline, which is why as an investor you should stay focused on the long term, and invest in companies that do the same. For one such promising long-term investment, check out our free report on "The Motley Fool's Top Stock for 2012."

Fool contributor Dan Newman holds no shares of the companies mentioned above. Follow him on Twitter, where he goes by @TMFHelloNewman. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services have recommended buying shares of Nokia, Apple, Travelzoo, and Microsoft and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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