Why the Dow Isn't Soaring

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After a mini-bailout was brokered over the weekend and the beleaguered Spanish banks all set to dine on TARP tapas over the weekend, conventional wisdom was that markets would see a boost from the increased eurozone stability. Remember, though, that the news broke Friday, and the markets, after opening down, showed solid gains to close out the best week of the year.

Consider today the morning after, when the hangover kicks in and the consequences of action from over the weekend become more apparent. Banco Santander (NYSE: STD  ) is down over 1% and the proverbial can-kicking hasn't fooled the bond market, as yields on Spanish debt rose, but hopefully the system will continue to stay solvent long enough until a more robust recovery can lift all sectors.

That said, let's take a closer look at where the three major indexes closed and at several stocks making headlines.



Gain/Loss %

Intraday Value

Dow Jones Industrial Average (INDEX: ^DJI  ) (55.44) (0.44%) 12,498.76
Nasdaq (20.93) (0.73%) 2,837.49
S&P 500 (5.75) (0.43%) 1,319.91

Source: Yahoo! Finance.

After seeing declines every session last week, the VIX (INDEX: ^VIX  ) , the market's "fear" index, has climbed 2% today. All three indexes are slightly in negative territory, with the tech-heavy Nasdaq witnessing the worst declines. On the Dow, only eight components have gains on the day, with financial stocks among the worst losers.

The Nasdaq's decline comes despite Apple (Nasdaq: AAPL  ) unveiling a new Macbook Pro at the company's Worldwide Developers Conference this afternoon. The new laptop has many long-rumored features including a retina display and the removal of the disc drive, enabling an ultra-thin design. Marketing Chief Phil Schiller called it "The most beautiful computer we have ever made," but that beauty comes at a price: The next-gen Macbook Pro starts at $2,199. Enthusiasm at the conference was palpable, and shares of related companies are getting bid up, including chip maker NVIDIA (Nasdaq: NVDA  ) seeing a 3% rise.

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Read/Post Comments (3) | Recommend This Article (11)

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  • Report this Comment On June 11, 2012, at 5:45 PM, Yourdeadmeat69 wrote:

    There's no joy in Mudville, or those betting just the fact that, --get this now--

    a. Spain, in trouble neck deep in the PIIGS trough, (for buying our fraudulent no doc loan paper and making a bunch of their own)

    b. got markets popping till 1000AM EST

    c. for just ASKING

    d. for $125B,

    e. to shore up Spanish banks

    f. with money it has to qualify for by halving its budget deficit from 10% to 4% in two years (GLWT, right?)

    g. so that runs on the bank don't Domino

    h. the rest of the PIIGS

    i. and sink the world into the other side of the W "recovery".

    j. being fought by low irates

    k. to lend money to businesses

    l. that are doing just fine with 17-20% world wide unemployment anyway (sans China)

    m. and, because of low to no taxes in America for example, have no negative incentive against which hiring folks might be a better choice for their money.

    n. which would guarentee a booming economy, ONLY under the assumption, full employment is a good ECONOMIC thing

    o. because with full employment, businesses can create the illusion of profits by raising prices

    p. in increasingly degraded paper currency

    q. which pops commodity prices to keep with the failing paper countries print and use instead of silver and gold

    r. and thereby create a virtuous cycle where fiat money degrades to nothing.

    Since today, actions to support Spain, by lending money to banks which Jose6Pac will never see anyway--dropped the euro against the dollar, and we all know that the dollar must be destroyed in order for the world to prosper!

    The market tanked. See how that works?

    No? Neither does anybody else, except Bent Bernookie, and he thinks this is a rational market.

    You may send my honorary doctorate in economics to 1234 Farquehar Lane, Bimforkle, Iderho.

    I'm going to begin drinking heavily. I know this stuff, I was premed.

  • Report this Comment On June 11, 2012, at 5:57 PM, bretco wrote:


    ; Yourdeadmeat 69; Funny stuff, but not really.

  • Report this Comment On June 11, 2012, at 7:27 PM, motocross333 wrote:

    to YOURDEADMEAT69- Smile buddy, live isnt so bad. By the contents of your post, it seems that you are one of the most bitter men on the planet because of either A) you lost your ass on stocks or market, or B) laid off & bitter C) both of the above, or not getting laid?

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