Why the Dow's Heading South This Morning

It used to be that for the most part, the only news that would move the U.S. stock market involved the U.S. economy. Yet the economy has truly become global, and the market's moves this morning show evidence of how interlinked the whole world has become. Weak readings on the state of the economies of China and Europe contributed to the overall malaise in the markets this morning, and although the Philly Fed reading on business conditions improved more than expected, it is still below the zero level, indicating continuing pressure on economic activity. This, along with jobless-claims numbers that disappointed investors, set a negative opening tone, and the Dow Jones Industrials (INDEX: ^DJI  ) fell about 22 points around 10:45 a.m. EDT.

Focusing on Dow stocks, the usual economically sensitive suspects were down the most on the day. But Hewlett-Packard (NYSE: HPQ  ) was also among the biggest losers, falling 2% on rumors about the possible sales of its Electronic Data Systems outsourcing division. HP denied the rumor, but the speculation is an indication of how desperate investors are for any sort of news indicating a solid strategy for HP going forward.

Chevron (NYSE: CVX  ) and ExxonMobil (NYSE: XOM  ) both rose modestly despite another drop in oil prices today. With crude fetching about $91.50 per barrel, the price of oil has fallen more than 8% just since last Friday. For those who are optimistic about the prospects for QE3's success, the drop seems out of sync with the boom in other asset classes. If it persists long enough, then Exxon and Chevron will feel the pain in their bottom lines in a quarter or two.

Finally, Microsoft (Nasdaq: MSFT  ) jumped more than half a percent. A German court determined that Motorola Mobility had infringed on one of Microsoft's patents. Combine this with a dividend boost, and Microsoft has been making investors pretty happy lately, although its coming Windows 8 release will overshadow minor patent-related news.

Learn more
When markets fall, you need to take stock and figure out what's happening to the companies you track. With Microsoft, there's a lot to keep track of. Get the help you need by reading the Fool's premium report on Microsoft. With in-depth analysis from our top tech team as well as regular updates, you'll always be up to speed. Click here and try it today.

 Fool contributor Dan Caplinger doesn't own shares of the companies mentioned in this article. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Exxon Mobil and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft and Chevron, as well as creating a synthetic covered call position in Microsoft. 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.


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.

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: 2024878, ~/Articles/ArticleHandler.aspx, 11/22/2014 7:18:38 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...


Advertisement