Why Ben Bernanke and Cease-Fire Talks Sent Markets Lower

The fundamental news about the U.S. economy is still strong, but fear has a firm hold on the market as stocks slide today. As of 3:10 p.m. EST, the Dow Jones Industrial Average (INDEX: ^DJI  ) has fallen 0.17%, while the S&P 500 (INDEX: ^GSPC  ) is down 0.11%.

The Census Bureau said today that the rate of homebuilding in the U.S. jumped to a four-year high of 894,000 homes annually. This is actually big news, because it should have a big impact on employment going forward. This positive news pushed stocks higher early in trading, but Ben Bernanke urged lawmakers to reach some sort of deal on the fiscal cliff and long-term policies related to taxes and spending, which sent shares south in later trading.

The biggest loser on the Dow was Hewlett-Packard (NYSE: HPQ  ) , which fell 12% after announcing an $8.8 billion impairment charge because of accounting issues at Autonomy, which HP acquired in 2011. The ghosts of epically terrible CEO Leo Apotheker are still haunting the company, and investors and regulators will be spending months trying to unravel the problems at Autonomy.

Energy stocks also fell on talk of a cease-fire between Israel and Gaza. Oil fell 2.8% today, and ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) followed by dropping 0.4% and 0.7%, respectively. Peace in the Middle East is good for the world, but it would have the effect of lowering oil prices, so it isn't necessarily good for all stocks.

The fiscal situation and tensions in the Middle East will continue to dominate market sentiment through the rest of the year. But let's not overlook improvement in housing and the upcoming shopping season. If housing and retail continue to improve, it will provide huge upside, especially if the cliff is averted.

We Fools have three picks in the retail space that will benefit from a strong Black Friday. You can read about the "3 Companies Ready to Rule Retail" in our special report. Uncovering these top picks is free today; just click here to read more.

Read/Post Comments (0) | Recommend This Article (2)

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.

Compare Brokers

Fool Disclosure

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: 2121917, ~/Articles/ArticleHandler.aspx, 10/27/2016 8:52:20 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...

Today's Market

updated 11 hours ago Sponsored by:
DOW 18,199.33 30.06 0.00%
S&P 500 2,139.43 -3.73 0.00%
NASD 5,250.27 -33.13 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:02 PM
HPQ $13.91 Up +0.01 +0.00%
HP CAPS Rating: ***
CVX $101.19 Up +0.42 +0.00%
Chevron CAPS Rating: ****
XOM $87.09 Up +0.37 +0.00%
ExxonMobil CAPS Rating: ****