Europe's Slide Weighs on a Sluggish Dow

Stocks aren't off to a fast day here on the Dow Jones Industrial Average (DJINDICES: ^DJI  ) . As of 2:15 p.m. EST, the Dow has lost just 11 point as it continues to hover around the 14,000 mark. However, disappointing numbers from overseas -- particularly in Europe, where the economy continues to sag -- have investors cautious today. Stocks are fairly evenly split between winners and losers, and there haven't been any eye-popping performances on the Dow.

Europe falling yet again
International GDP numbers soured the markets early today. The eurozone reported GDP contraction in the most recent quarter of 0.6%, outstripping projections of a 0.4% decline. For 2012 as a whole, eurozone GDP fell 0.5% as the region struggles to emerge from its ongoing fiscal crisis. Periphery nations in Europe particularly cut into that number, with Italy seeing a 0.9% contraction in the fourth quarter alone. The pain wasn't limited to the continent, however: Japan saw real GDP sink at an annualized rate of 0.4% in its most recent quarter as the country fights to bring down a strong yen.

Individual stocks on the Dow aren't suffering too much from the overseas contraction, but few big winners dot the index. Alcoa (NYSE: AA  ) has managed to make the best of this sluggish day, with shares gaining 1.9% to lead the Dow. China's state-owned investment firm CITIC announced earlier that it would buy a $468 million stake in Alumina, a major partner with Alcoa. It's more good news for Alcoa investors and another boost to the aluminum stock, which has picked up nearly 12% over just the past three months.

Financials are also managing to scrape up gains. JPMorgan (NYSE: JPM  ) ranks among the top Dow leaders with gains of 1%. The sector got a boost today from Berkshire Hathaway's (NYSE: BRK-A  ) announcement that it, along with Brazilian firm 3G Capital, will acquire Heinz for $23 billion. The massive deal sparked hope in the sector that more merger and acquisition deals could be on the way. That's good news for JPMorgan if true, as the bank ranks among the top firms in handling such M&A moves alongside other major financial institutions.

Rounding out the Dow is Cisco (NASDAQ: CSCO  ) . The tech company is down 1.3% so far to lead the index into the red. The company did post earnings that topped expectations yesterday, but some investors couldn't handle the company's guidance that only met -- rather than exceeded -- projections for the next quarter. There's little for investors to worry about in the long term, as Cisco's still looking ahead to strong earnings: Its stock's nearly 20% gain over the past three months is testament to the company's direction.

Are you at ease...or nervous? It's been a great five-year run for investors, with the Dow and S&P at or near all-time highs. Yet fears abound. When will the next downturn hit? Will political gridlock lead to portfolio-killing inflation? To learn how to protect your portfolio, click here for free guidance from the Motley Fool Pro Academy!


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