After falling more than 100 points yesterday, the Dow Jones Industrial Average (^DJI -0.82%) took a go at rallying earlier in trading, jumping 72 points after the Japanese central bank announced an accelerated QE policy this morning. But the gains were short-lived and the index fell again -- though it remains in positive territory as of 11:45 a.m. Up 16 points, the Dow may have a fight ahead of it based on the weak economic news released so far this morning.
International news brought some good vibes to investors this morning as the Bank of Japan announced that it would be doubling its balance sheet by 2015 through accelerated bond purchases. The majority of the bonds would be long-term government paper as the bank tries to target a 2% inflation rate to spur on growth after years of deflation.
Yesterday's weak labor market data really took its toll on the market, so today's jobless claims report is likely to do the same. A spike in new claims surprised analysts, who expected claims to drop by 7,000 to 350,000 -- instead, new jobless claims rose to 385,000 last week. Investors should pay close attention to tomorrow's employment situation report, which could bring some positive news, but if it supports the trend of a softening labor market, then the Dow could be headed back south.
Tech gets left in the dust
Of the Dow's 30 component stocks, three major tech players were in the red this morning: Intel (INTC 2.07%), IBM (IBM -8.06%), and Microsoft (MSFT -2.57%).
Intel has had some positive news lately regarding its push to join the smartphone race, with its Atom Clover Trail+ processor in the Lenovo IdeaPhone K900 beating out the new Samsung Galaxy S4's ARM CPU in benchmark tests. The chip maker is also expanding its mobile presence in the Chinese market, with an exclusive partnership with ZTE, China's second-largest mobile manufacturer. Closer to home, Big Blue is still dealing with its long-running antitrust case regarding the marketing of its microprocessors. Citing a recent Supreme Court case, Comcast v. Behrend, Intel is looking to have the defendants' right to sue as a class rejected, which could lead to settlements if the company's motion wins.
IBM has been trying to downplay the recent independent benchmark tests that showed the new chips and servers from rival Oracle outperformed the company's own products. The continued race for speed and low cost has always dominated the industry, and IBM has to begin to find new ways to win. The tech giant is working on other projects, which have helped it along so far. Its big data push has been moving along, with the company announcing new improvements and advances for the Hadoop System that will accelerate performance and simplify administration.
Microsoft took a blow this morning with Bank of America/Merrill Lynch analysts' downgrade of the company from "buy" to "neutral," along with a lower price target. Some are concerned that Mr. Softy won't even be relevant in the coming years, with continued pressure from competitors and poor-selling products.
On the brighter side
Hewlett-Packard (HPQ 0.25%) was trading in the positive this morning, with a gain of almost 1%. Despite a downgrade from analysts to "sell" earlier in the week, the personal computing giant is seeing some positive movement so far today. This also comes at a time when chief rival Dell is looking to settle the score and outpace HP with server sales.
