After Gorging on Gains, Markets Take a Breather

After moving in agreement for four consecutive days, major U.S. equity indexes closed today's trading in mixed fashion. Volume, the number of trades placed during the day, was reasonably light, suggesting a degree of indecision, or at minimum, a lack of conviction, from investors today.

Index

Gain / (Loss)

Gain / (Loss) %

Value

Dow Jones Industrial Average (INDEX: ^DJI  )

(10.5)

(0.08%)

13,165

S&P 500 (INDEX: ^GSPC  )

0.6

0.04%`

1,403

Nasdaq

7.4

0.25%

3,018

Source: Yahoo! Finance.

It's hard to blame them, especially considering the motley economic data released today. From China, we heard that industrial production continued to decelerate for a third consecutive month. That report matches the trend in consumer spending of late and contributed to measured inflation numbers reported from The Middle Kingdom. While slowing growth in such a large, emerging economy is troubling, the truth remains that Chinese policymakers have plenty of tools at their disposal to stimulate growth in such a tepid inflationary setting. As for the U.S., weekly jobless claims declined unexpectedly from the previous week -- adding to hopes of a rebound in labor markets sparked by last Friday's better than expected non-farm payrolls report.

To summarize: The U.S. labor situation is showing signs of perking up, growth in China is decelerating, and need I mention the misadventures of Europe? There's a lot to digest out there for investors, and perhaps markets simply took a break after gorging on sizable gains for the past few sessions. Let's just hope they don't jump on the investment equivalent of a cleansing diet -- we all know how that ends.

In individual stocks, today's biggest winners included Cisco (up 3.2%) within the Dow and Alpha Natural Resources (NYSE: ANR  ) among S&P 500 components. Shares of coal outfit Alpha climbed 15% today following bullish commentary out of James River Coal regarding the demand environment for thermal coal. While the rally today was nice, investors don't have much to brag about given the 65% decline shares have endured year to date.

On the losing end today, shares of high flying energy drink maker Monster Beverage (Nasdaq: MNST  ) crashed 10% after posting revenue and earnings below analyst expectations. The report marks the first time in five quarters that the company missed expectations, spooking investors away from this high-growth, but equally pricey stock.

Also heading south and leading the Dow's decline today were shares of American Express (NYSE: AXP  ) , down 2.5% after what may have been a slip of the tongue by CEO Kenneth Chenault at a meeting today. In a Regulation FD (Fair Disclosure) filing made earlier today, the company 'fessed up to some material information the big cheese doled out during the meeting: Worldwide billed business slowed in July.

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Brenton Flynn owns no shares of the companies mentioned. The Motley Fool owns shares of Cisco Systems. The Fool has created a bear call spread position in American Express. Motley Fool newsletter services have recommended buying shares of Monster Beverage. Motley Fool newsletter services have recommended creating a write covered strangle position in American Express. The Motley Fool has a disclosure policy.
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