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Investors looking for some action had to look beyond the stock market today, as conflicting pieces of economic data largely canceled one another out -- which of course is simply another way to say markets did absolutely nothing today. Seriously, nothing. At day's end, the Dow Jones Industrial Average (INDEX: ^DJI ) added a measly two points today, registering a microscopic gain of 0.02%.
In a more bearish note, both the S&P 500 and Nasdaq each ended lower, dropping 0.01% and 0.2%, respectively.
Two macroeconomic storylines dominated the day's news. First, in domestic news, a report from the U.S. Commerce Department showed that retail sales rose 0.8% in July, well ahead of economists' expectations. However, news from the other side of the Atlantic painted a far less favorable picture. While the German economy beat expectations, growing at a paltry but still positive 0.3% in the last quarter, and the French economy avoided recession, the overall EU economic output dipped 0.2% in Q2.
The continued sputtering of the European economy remains the single greatest threat to the fading global rebound, and stock performance remains relatively weak. Simply stated, people are scared and uncertain about the health of the eurozone. This is why valuations remain depressed despite relatively healthy corporate profits so far this year. Again today, the news spooked investors, driving the market's oft-cited "fear gauge," or the VIX (INDEX: ^VIX ) , sharply higher, to the tune of an 8.4% gain on the day. Sure, EU policymakers have made some progress, although much still needs to be done before investors see a light at the end of the tunnel.
Around the markets
Earnings announcements did generate some substantial swings in individual shares prices today. Shares of Home Depot (NYSE: HD ) rose 3.6% to lead the Dow after the company reported better-than-expected profits and raised its guidance for the remainder of the year. This kind of news also helps support the case for the beginning of a recovery in the housing market that many experts have suggested that, although weak, is already under way.
In other positive news, shares of Michael Kors Holdings (Nasdaq: KORS ) skyrocketed 16.5% after the company beat earnings and raised its full-year view. The company, which ranked as the best-performing major IPO last year, shows no signs of slowing down despite the relatively sluggish consumer environment. Not every report was as rosy, though. Daily-deal site Groupon (Nasdaq: GRPN ) tanked 26.8% as its quarterly earnings and guidance came in below analyst expectations. Its shares now sit a depressing 79% below their IPO level.
The markets right now are a complicated place. One on hand, stocks, especially blue-chip dividend-payers, offer extremely compelling risk/reward profiles. However, several major issues still loom large and threaten to crush investors again. In times like these, it's best to remember that winning over the long term at times requires a bit of a contrarian streak. That's why we highlighted three stocks on the Dow that are safe and cheap and should offer investors plenty of upside in years to come. To find out about the three best plays on the Dow, access the Fool's new research report detailing the three Dow stocks investors should love today.