Can the Dow Bounce Back Today?

A day after the market got crushed on negative global economic data, the Dow Jones Industrial Average (INDEX: ^DJI  ) hopes bounce back before heading into the weekend. Dow futures were headed up before the bell, despite Moody's announcing that it was downgrading a host of domestic and international banks after markets closed yesterday. Citing "significant exposure to the volatility and risk of outsized losses inherent in capital markets," the agency lowered the ratings of Bank of America (NYSE: BAC  ) , JPMorgan Chase (NYSE: JPM  ) , and 13 other major financial institutions. Moody's believes that the current market volatility will make it harder for the banks to pay back their debts, but investors appeared to have already priced in the downgrade, which Moody's telegraphed back in February.

Overnight markets fell in Asia, and the FTSE and DAX were down about 1% in Europe. A key German economic indicator fell by 1.6 points earlier today, coming in below market expectations. At the G20 Summit, Spanish Prime Minister Mariano Rajoy has come under criticism for not grasping the severity of his country's financial situation or responding to it appropriately.

Rumors are swirling that Google (Nasdaq: GOOG  ) CEO Larry Page may be suffering from serious health problems. Page was not at his company's shareholder meeting this week, and Google has said that he would not be at next week's I/O developer conference or available for its earnings call, which sparked concern because the quarterly report is still a few weeks away. The company had previously said Page was suffering from a voice condition and couldn't speak at the shareholder meeting. Shares of the search engine are down about 15% in the last three months.

While Dow futures may be headed north right now, I'd expect any recovery today to be a tepid one. Yesterday's negative economic news still lingers, and little has changed to restore confidence that Europe can overcome its debt crisis. With no economic reports scheduled today, there is little reason to see why market winds would change.

Keep your eye on the ace
Moody's downgrade of Wall Street banks may have investors souring on those investments, but there are several undervalued regional banks that our analysts believe have been unjustly punished for Wall Street's shenanigans. Some of the best investors of our time, including Warren Buffett and John Paulson, agree that these stocks are steals. Unfortunately for them, these investing kings manage too much money to make meaningful investments in such small companies, leaving a golden opportunity for you. Get the names of these hidden value plays in our special free report: "The Stocks Only The Smartest Investors Are Buying." You can get your free copy by clicking right here.

Fool contributor Jeremy Bowman owns shares of Google. The Motley Fool owns shares of Bank of America Corporation Com and JP Morgan Chase. The Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Google. The Motley Fool has a disclosure policy.
We Fools may not 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.


Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1921138, ~/Articles/ArticleHandler.aspx, 10/21/2014 12:00:24 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 16,562.12 162.45 0.99%
S&P 500 1,931.98 27.97 1.47%
NASD 4,393.75 77.67 1.80%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2014 11:45 AM
^DJI $16562.12 Up +162.45 +0.99%
DOW JONES INDUSTRI… CAPS Rating: No stars
BAC $16.46 Up +0.20 +1.23%
Bank of America CAPS Rating: ****
GOOGL $534.65 Up +2.27 +0.43%
Google (A shares) CAPS Rating: ****
JPM $57.66 Up +1.03 +1.81%
JPMorgan Chase & C… CAPS Rating: ****

Advertisement