Why the Dow Stumbled 74 Points Lower Today

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Despite improving employment numbers, yesterday's news that the Fed will continue injecting money into the economy, and higher November retail sales, the markets moved lower today on government inaction. Worries that a fiscal cliff deal may not be struck before the January deadline increase by the day. No progress was made today, and the Dow Jones Industrial Average (DJINDICES: ^DJI  ) accordingly fell 74 points, or 0.56%, to close at 13,170. 

Jobless claims fell by nearly 30,000 -- more than economists expected -- to 343,000 for the first week in December. Meanwhile, domestic retail sales picked up 0.3% in November. And yet, the bottom line is that the entire economy hinges on a Congress with 18% approval ratings coming to an agreement with the same president in charge during last year's "debt ceiling" fiasco.

Fear was, appropriately, the dominant emotion of the day, as 25 of the 30 Dow components dropped, and none moreso than Merck (NYSE: MRK  ) , which fell about 2% on fiscal cliff-related news. The company's CEO said yesterday that if a fiscal cliff solution involved capping drug prices, drug innovation and development would be impaired for the entire industry. 

Meanwhile, Caterpillar (NYSE: CAT  ) was the Dow's top gainer, adding about 0.5%, after the company announced it would be accelerating dividend payments into 2012 in order to avoid potential tax consequences from a fiscal cliff scenario. The company's first-quarter dividend will now be paid Dec. 31. 

Elsewhere, Apple (NASDAQ: AAPL  ) shares took a 1.7% haircut after allowing rival Google's (NASDAQ: GOOGL  ) Google Maps application on its iPhone. There has been huge fallout from Apple's newest Maps technology, which recently was still doing things like getting people lost in Australian deserts. Maps software has tremendous commercial potential, and it's not encouraging that Apple still hasn't cracked the code on it. 

Another company in mobile that has made a mistake or two of its own is Research in Motion (NASDAQ: BBRY  ) . While this BlackBerry maker has nearly become obsolete, its stock has been resilient, rising more than 80% in the last quarter alone. It's still down for the year, but today's announcement that two new BlackBerrys with revamped interfaces are hitting the market on Jan. 30 appears to be a faint glimmer of hope. 

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Read/Post Comments (3) | Recommend This Article (4)

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.

  • Report this Comment On December 13, 2012, at 6:34 PM, oilpatch71 wrote:


  • Report this Comment On December 13, 2012, at 7:21 PM, dwilh51183 wrote:


    SO LET'S ANALYZE THIS. Apple makes roughly $16 billion every month or $4 billion every week. Apple is on track to make $60 billion this quarter alone. Apple is now selling Products in more than 100 countries. Last year they were selling products in 50 countries, so that bodes well for more sales! Apple is buying back $10 billion worth of their own stock. Apple has new products on the horizon. Apple's market share has went from 51% to 56% on iPhone sales, and sales are soaring from 10 million iPhones sold three years ago to over 500 million phones sold this year ,to 1 billion phone's expected to sell in the next two years; so I would think that it's a strong bye. no other company in the world makes the kind of money that Apple makes

  • Report this Comment On December 13, 2012, at 8:21 PM, digitally404 wrote:

    RIM upside > Apple upside.

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