Dow Pauses With 15,000 in Its Sights

Stocks were mostly flat today as the S&P 500 hit a new record high at 1617.50, but the Dow Jones Industrial Average (DJINDICES: ^DJI  ) was down slightly by five points, or 0.03%. No major news was pushing markets as investors continued to digest last week's bullish announcements, including the federal employment report, and on monetary policy both at home and in Europe. There were no economic reports released today, and no major earnings reports out.

After hours, the Senate approved the Marketplace Fairness Act, taking an important step toward imposing an Internet sales tax that would help brick-and-mortar retailers compete on a level playing field with the likes of online heavyweights such as Amazon.com. The law could also be a boon for big-box chains like Best Buy. The bill will now move on to the House where Republicans are divided on its passage.

On the Dow today, Bank of America (NYSE: BAC  ) was the big winner, gaining 5.2% after settling a long-standing dispute with insurer MBIA over mortgage bonds issued during the housing bubble. Shares of MBIA finished up 45% as B of A agreed to pay $1.7 billion to resolve the legal matter. Investors clearly considered the settlement a victory for MBIA, and Bank of America has taken several steps in recent months to escape the litigious hangover from its 2008 acquisition of mortgage lender Countrywide, having paid a total of $16.9 billion on five settlements in this year alone.

UnitedHealth (NYSE: UNH  ) shares were also looking brighter today, gaining 2.2% after JPMorgan Chase upgraded its rating on UnitedHealth and Humana to overweight, saying the insurance providers should be able to grow their Medicare Advantage enrollment in spite of potential reimbursement cuts. UnitedHealth shares have bounced up and down this year as the government has changed its expected cut to the program from 8% to 4%.

Finally, Merck (NYSE: MRK  ) was the worst performer on the Dow, falling 1.5%. There was no company-specific news out on the drugmaker today, but investors are continuing to flee the stock after a disappointing earnings report last week. Merck's revenue dropped more than expected after going over the patent cliff on its Singulair asthma medication, and the market seems worried about where future revenue growth will come from.

Bank of America's stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it's critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool's premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank's operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.


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: 2412700, ~/Articles/ArticleHandler.aspx, 10/31/2014 3:33:43 PM

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