Dow Posts Modest Gain on Mixed Day

While company earnings are supposed to drive the market higher or lower, that only seems to be the case on those few days of the year when the company officially reports earnings or announces possible future results. Most of the time, a stock moves higher or lower because of negative news, rumors, mergers, or a competitor's positive or negative results. Today, the majority of the Dow Jones Industrial Average's (INDEX: ^DJI  ) stocks are moving because of the latter, not actual company earnings. The index itself managed to move slightly higher, gaining just 17 points, or 0.13% and now rests at 13,488.

Of the Dow's 30 components, 15 of them ended the trading day in the red. This afternoon, I explained why three of the biggest Dow losers were Boeing (NYSE: BA  ) , Bank of America (NYSE: BAC  ) , and Hewlett-Packard (NYSE: HPQ  ) . To read about what negative news helped push these companies lower, click here. Or stick around to learn about the outside forces affecting the stock prices of UnitedHealth (NYSE: UNH  ) , Verizon (NYSE: VZ  ) , and AT&T (NYSE: T  ) .

So what happened?
Shares of UnitedHealth lost 0.55% today as investors fear this year's flu season may hurt the company's earnings. It's been reported that incidents of the flu in the final quarter of 2012 hit their highest level since 2009  and just yesterday reports spread that the U.S. faces a shortage of the flu vaccine. One analyst from Susquehanna Financial Group says that long-term investors should not worry about this flu season or any other, because it is unlikely to have any real effect on earnings over the long run.

Both of the Dow's telecommunications stocks fell today, possibly for the same reason: rumors of large purchases in their future. Shares of Verizon ended the day down 0.67% while AT&T's lost 0.29% of their value. Verizon CEO Lowell McAdam recently told The Wall Street Journal that his company would "love to own all of that asset," referring to Verizon, which only owns 55% of itself while Vodafone (Nasdaq: VOD  ) owns the other 45%. He went on to say, "I think [a deal] is feasible." One analyst puts a price tag of $107 billion for Vodafone's share of the company.  

As for AT&T, as the battle over spectrum heated up this week, talk that the company may still be interested in Dish Network's (Nasdaq: DISH  ) spectrum hit front and center when Dish offered to purchase more spectrum with its buyout offer of Clearwire on Tuesday. It is now believed that if AT&T wants any of the asset from Dish, it would have to purchase the whole company, not just cherry-pick the good parts. At Dish's current market capitalization of $16.35 billion, a buyout offer would be rather pricey for AT&T right now.  

More Foolish insight

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.


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: 2192583, ~/Articles/ArticleHandler.aspx, 11/23/2014 8:09:30 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