The Eye of the Storm: Dow Steady Now, Trouble Ahead

The Dow Jones (INDEX: ^DJI  ) is down 0.55% as of 2:40 p.m. EDT. The situation looks even more placid when you zoom in on the S&P 500 (INDEX: ^GSPC  ) and the Nasdaq (INDEX: ^IXIC  ) , both of which stand within a tenth of a point of being flat on the day.

Zooming in on individual stocks, there's few outliers to the trend of a flat market. Technology stocks lead the way, posting a 0.56% gain so far today. Memory stocks are soaring with SanDisk (Nasdaq: SNDK  ) posting the largest gain of any technology stock, followed by Micron (Nasdaq: MU  ) running in second place. With little industry news to be found, call it a rebound of one of the weakest industries. The PHLX Semiconductor index is down 17% since topping out on March 26.

Doppler says today looks safe
However, let's get real: If you're looking for news today, you're looking in the wrong place. Scanning the news for market-moving events today is kind of like looking for Super Bowl highlights 30 minutes before the game comes on.

That's because markets are now in a holding pattern. The entire market plummet across May has centered on Greece leaving the eurozone. Until there's more news on that front, there's simply going to be very little market reaction. With Greece set to run out of money in early July and facing upcoming elections, that reaction isn't far off. But until then, we are truly in the eye of the storm.

A few suggestions
As there's little news today, allow me to get on my soapbox and present investors out there with what to key in on during the week ahead:

  1. Be aware of the long-term implications of a China stimulus: I know, I know, more growth is always good and investors are positively jazzed up about the idea of China stimulating its economy. However, as I noted in an earlier article, not all growth is created equal. If China promotes too much investment in areas like infrastructure to keep GDP figures elevated instead of accepting lower growth focused on consumer spending, it's just delaying an inevitable hard landing.
  2. Watch the jobs: The last jobs report was a disappointment. The U.S. economy created just 115,000 jobs in April. However, job gains are often very lumpy and need to be measured over a longer time frame. With companies tightening up budgets and recent earnings in sectors like technology sliding, the next jobs report will be more in focus. A positive reading could go a long way to soothing fears that Europe's slowdown is already spreading across the Atlantic.

Long-term bets
As always, when you're a long-term investor -- as we are at the Fool -- your best opportunity comes when high-quality companies are sold off in periods of protracted panic. That means identifying strong market leaders and having a watchlist ready to pounce upon buying opportunities. Obviously, if Europe continues worsening, that can mean much more downside ahead. Yet that just shows the importance of continually investing in the market as you're building your savings and avoiding the trap of only buying at peaks of optimism and running to the sidelines when pessimism reigns.

Taking the long view
That's it for today's market checkup. While staring at stock screens all day can be bad for your health, the best investors don't pull out of the market. Instead, they find stocks they can live with for the long haul. Check out The Motley Fool's special report on long-term investing, where you'll find three promising stock picks for long-term investors, along with some tips on how to invest for your golden years. It's free, but don't wait -- get your report today while it's still available.

Eric Bleeker owns shares of no companies listed above. The Motley Fool has a disclosure policy.
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