June 5, 2012
With the big correction in stocks lately, it seems like the stock market will never go back up. Plenty of overarching concerns, including the European crisis and signs of slowing economic growth around the world, aren't going to get resolved quickly, and they've weighed down stock sentiment for a while now. Although a small increase in an index tracking expansion in the services sector brought back some optimism to the market, the Dow Jones Industrials (INDEX: ^DJI ) gave up modest early gains and were down about three points just before 11 a.m. EDT.
From looking at the Dow stocks that are making substantial moves, it's clear that even the faintest whiff of good news can help drive beaten-down sectors. Bank stocks Bank of America (NYSE: BAC ) and JPMorgan Chase were the big winners on the Dow, both rising more than 3%. Yet JPMorgan still faces fallout from its trading debacle, which some now believe could cost the bank more than $4 billion, double the original estimate. Meanwhile, news that B of A is selling $10.4 billion in residential mortgage servicing rights to Nationstar Mortgage highlights the extent to which Bank of America is still trying to raise capital by divesting assets.
On the down side, United Technologies (NYSE: UTX ) fell about three-quarters of a percent. Coming off its successful issuance of $9.8 billion in bonds last week, the company now looks poised to move forward with its acquisition of Goodrich. United Tech expects the deal to close in July, but even after the merger is complete, the company will have to deal with a tough defense environment.
Finally, Coca-Cola (NYSE: KO ) fell about 0.5%. The company announced that it had joined with a group of companies including Ford (NYSE: F ) and Heinz to further the use and development of plant-based plastics. The move should help Coke bolster its own technology in the space, which Heinz has licensed from the drink giant for some of its own products.
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