Unemployment Claims Fall, but So Does the Dow

After the markets were hit with a number of both positive and negative economic data points today, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down 16 points, or 0.12%, to 13,967. The other major indexes are also flat, with the S&P 500 and the NASDAQ both hovering within a point of breakeven.

The weekly first-time unemployment claims were released today, showing a drop of 27,000 from the prior reporting period. The seasonally adjusted 341,000 is the lowest reading in the past three weeks, and the four-week average now sits at 352,500. This good news was outweighed by negativity around the globe: GDP fell to an annualized rate of 0.4% in Japan, while the eurozone experienced a decline in GDP of 0.6% in the fourth quarter.

Who's down on the Dow?
The Dow telecom stocks are taking it on the chin today: Shares of AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) are down 0.9% and 0.7%, respectively. My Fool colleague Jessica Alling noted earlier today that AT&T and other DSL providers are embroiled in a patent-infringement suit brought on by Intellectual Ventures. This could be causing the stocks to fall, but I believe this is more of an industrywide decline related to the announcement that CenturyLink (NYSE: CTL  ) is cutting its dividend by 25%. The company will be reallocating capital from its dividend program to share repurchases and debt reduction. While CenturyLink is a local, land-based telecom service provider, investors expect high dividend yields from the entire industry, and whenever a company cuts its dividend, investors become nervous that others will follow suit.

Cisco Systems (NASDAQ: CSCO  ) is currently the Dow's worst-performing stock of the day, with shares down 1.2%. The company announced quarterly earnings last night that, on most levels, looked strong. The company beat analysts' expectations on earnings per share and hit expected revenue dead-on. But the shares are likely falling because of gross margin and operating margin declined during the quarter. Get the full run-down on the earnings report by clicking here.

More Foolish insight
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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