Why the Dow Wouldn’t Fall

For the first time since 2008, unemployment is under 8%. However, despite the good news of 7.8% unemployment, markets sold off as the day dragged on.

The Dow Jones Industrial Average (INDEX: ^DJI  ) fought its way to keep a 35 point, or 0.3% gain, as both the S&P 500 and the Nasdaq saw declines. The S&P snapped a four-day winning streak with its tiny half a point loss, but the Nasdaq sold off a more substantial 0.4%. Of course, daily moves, especially under half a percent, shouldn’t necessarily alter your buy thesis; but it's an indicator to stay focused,  as  earnings season begins at the start of next week, when Dow component Alcoa (NYSE: AA  ) reports. Analysts expect Alcoa to check in with a penny per share in earnings for the quarter, which is a significant decline, both sequentially and year over year.

Staying focused on the Dow, Home Depot (NYSE: HD  ) kept its strong run going, as shares increased 2.4%. Reduced unemployment would obviously help buoy its core business and sustain the nascent housing recovery.

On the other end of the spectrum, Hewlett-Packard (NYSE: HPQ  ) is still suffering fallout from its epic fail of a 2013 guidance revision on Wednesday. A series of Wall Street firms pounded the stock with downgrades. The latest was Sterne Agee, who dropped HP from buy to neutral. Even worse, Moody’s cut its credit rating to A- from A, weakening the company’s fiscal position. Despite being down 42%, this stock still looks expensive based on weak growth. CEO Meg Whitman has a tough turnaround ahead of her.

Meanwhile, the reason for the Nasdaq’s underperformance can, in part, be credited to Apple (Nasdaq: AAPL  ) , which lost 2% on the day. This was just mourning for the anniversary of the passing of visionary leader, Steve Jobs. News of a 3- to 4-thousand person strike at a Foxconn facility could disrupt iPhone 5 production. Apple has yet to comment on this story, but it is one to follow through the weekend.

To find out whether Apple is a buy after trading down from $700 per share, download our new premium Apple report. It will tell you everything you need to know about the iPhone 5, the rumored iPad mini, and what surprises Apple has in store for investors and consumers going forward. Get your copy today -- along with a year of cost-free updates -- by clicking here.

David Williamson holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of The Home Depot and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy. We Fools may not 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.


Read/Post Comments (0) | Recommend This Article (9)

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: 2046579, ~/Articles/ArticleHandler.aspx, 8/30/2014 10:19:45 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...


Advertisement