Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The Markets Get Hammered Again

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The markets continue to shuffle through variations of the same storylines, and today the picture got even cloudier after Europe and earnings both punished the markets, sending the Dow Jones Industrial Average (INDEX: ^DJI  ) down 0.82% and dropping the S&P 500 (INDEX: ^GSPC  ) 0.90%.

Moody's downgraded its Germany, Netherlands, and Luxembourg outlook to negative, while manufacturing shrank even more than expected in July for France and Germany. The misery spread throughout Europe, as Spanish bond yields hit a eurozone high, raising concerns about the country's need for a bailout, and reports showed that Greece may need to restructure its debt further. The news in and of itself means little, but it legitimizes concerns of a European recession that could have a devastating impact on the U.S. economy.

In fact, it may already be starting to hurt U.S. earnings. Some quality companies continue to reduce costs to account for slowing revenue growth, but investors would like to see more signs of a blooming market landscape. And today's fall didn't even factor in that the world's largest company, Apple, missed badly on earnings.

UPS (NYSE: UPS  ) stumbled nearly 5% after it missed earnings and reduced its economic outlook, leading the downslide. The company transports orders for different aspects of the economy, making it a great measuring stick for economic growth. Missing earnings hurt a bit, but the company still increased its EPS 7.5% to $1.15 year over year. The hammer came from UPS's slashing of full-year estimates and lowering of U.S. GDP expectations to 1% for the year, easily beneath most economists' expectations.

The company cushioned its losses much better than for-profit education company DeVry (NYSE: DV  ) , however. Oppenheimer, Citigroup, and JPMorgan Chase all downgraded the company today, including a move from JPMorgan down to underweight. The company's fourth-quarter earnings preview caused the poor outlook for DeVry, even dragging down competitors such as Apollo Group. Long considered a strong play, DeVry sported EPS estimates of $0.46 that fell far short of previous expectations of $0.79, and revenue shrank as well.

But all the sour news couldn't sink telecommunications company MetroPCS (NYSE: PCS  ) . The entire industry soared behind strong earnings reports from leaders AT&T and Verizon, increasing investor optimism that the company can offer even more good news when it releases earnings on Thursday. Macquarie upgraded shares of MetroPCS from neutral to outperform.

The investment climate is beginning to resemble an individual stock. If European problems disappear and the U.S. economy can stabilize growth, stocks could see incredible returns, at least based on the Dow's P/E of around 14. But on the other hand, the unstable market does mean an incredible amount of risk. So are the markets crying wolf?

For the smart investors, it doesn't really matter. No one knows how the macro landscape will take shape in the upcoming months, but quality companies will grow in the long run. Many of these companies even supplement this growth with dividends. So how do investors find the top performers? The Motley Fool's free report, "The 3 Dow Stocks Dividend Investors Need," identifies three stocks that will combine steady growth with consistent earnings. It's completely free, so get your copy before it's gone.

Fool contributor Will Chavey owns no shares of the stocks mentioned above. The Motley Fool owns shares of Citigroup, JPMorgan Chase, and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Moody's and creating a bull call spread position in Apple. 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. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (3)

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.

Compare Brokers

Fool Disclosure

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: 1956168, ~/Articles/ArticleHandler.aspx, 10/24/2016 12:10:59 AM

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 2 days ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

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

10/21/2016 4:47 PM
^DJI $18145.71 Down -16.64 -0.09%
^GSPC $2141.16 Down -0.18 -0.01%
S&P 500 INDEX CAPS Rating: No stars
DV $22.66 Up +0.33 +1.48%
DeVry CAPS Rating: **
TMUS $46.75 Down -0.30 -0.64%
T-Mobile US CAPS Rating: ***
UPS $107.16 Down -0.24 -0.22%
United Parcel Serv… CAPS Rating: ****