Why the Dow Broke Its Winning Streak Today

The market yet again looked to the government for its cue on Wednesday, and what it saw was enough to end the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) five-day winning streak. After trading in positive territory for almost the entire day, the index quickly fell more than 100 points in just a few hours in reaction to the Federal Reserve meeting. The Fed announced that it will continue its "Operation Twist," in addition to purchasing $45 billion worth of U.S. Treasuries per month starting in January, but it expressed fears over the impact of the fiscal cliff. The Dow closed down about 3 points, or 0.02%, finishing at 13,245.

Hewlett-Packard (NYSE: HPQ  ) was the Dow's biggest winner today, adding 1.9% on news that it won a bid to provide 1.5 million computers to students in India. As the worst year-to-date performer in the 30 stock index, HP can use all the good news it can get. 

Wal-Mart Stores (NYSE: WMT  ) , on the other hand, was the Dow's biggest loser of the day, backtracking 2.75%. One (downward) catalyst for its stock in the past few days has also come out of India, where allegations of bribery have arisen. On top of that, the fiscal cliff is rearing its ugly head in a direct way, as its CEO publicly expressed worries that the company expected lower consumer spending as a result of family budgeting this holiday season. 

Another factor causing some stir in the markets today came in a more routine form: analyst upgrades and downgrades. Shares of disk-drive maker Seagate Technology (NASDAQ: STX  ) and the streaming service Netflix (NASDAQ: NFLX  ) both saw volatility on news of updated analyst opinions. Seagate fell more than 3% as JPMorgan Chase (NYSE: JPM  ) cut its rating on the stock to underweight from neutral amid fears of slower growth.

Netflix shares, in the meantime, popped 5.4% on a higher price target estimate from Morgan Stanley (NYSE: MS  ) , which raised its target for the stock to $105 per share from $80. Netflix's stock currently trades for just over $90. 

The precipitous drop in Netflix shares since the summer of 2011 has caused many shareholders to lose hope. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.


Read/Post Comments (0) | Recommend This Article (6)

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: 2151289, ~/Articles/ArticleHandler.aspx, 8/30/2014 2:12:59 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