Why the Dow's Killing Time This Morning

Investors often get lost in the details, but for most people, the broad economy is what's most important. Today's economic news provides a decidedly mixed picture. On one hand, a popular index of home prices saw its first year-over-year gain in nearly two years. Yet confidence among consumers is at its lowest level of 2012, with rising concerns about price increases. Add those competing news stories up and you get a more-or-less flat market, with the Dow Jones Industrials (INDEX: ^DJI  ) rising about 14 points just after 10:45 a.m. EDT. The broader market added similarly narrow gains.

Hurricane-related investment themes took center stage early Tuesday, as New Orleans and the rest of the central Gulf Coast brace for the expected landfall of Tropical Storm Isaac sometime tomorrow. Oil stocks ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) were among the top gainers in the Dow, both rising more than half a percent as Gulf production and refining activity come to a standstill. Although the crude oil market was largely unaffected yesterday, prices of gasoline futures skyrocketed, which will likely send prices at the pump above $4 per gallon for a wide swath of the country.

Meanwhile, Travelers (NYSE: TRV  ) was mostly unchanged after losing ground yesterday. But rival Allstate may emerge from Isaac relatively unscathed, given the big drop in Louisiana homeowners' insurance exposure that it set in motion after Hurricane Katrina hit.

Finally, Alcoa (NYSE: AA  ) rose almost 1%. Yesterday's news that major producer RUSAL would cut capacity 3% may have a short-term positive impact on Alcoa, as industry players share the pain from a weak aluminum market. But longer-term, the move reflects continued low expectations for a recovery, and that's not good news for Alcoa investors.

Put time on your side
Killing time may be OK for a short while, but longer-term investors need to realize the great value that time has. The Motley Fool's special report on three Dow stocks that feature growth and income emphasizes the importance of a long time horizon. Check it out -- for free! -- today.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter @DanCaplinger. Motley Fool newsletter services have recommended buying shares of Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


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