Why the Dow Slumped 80 Points Today

On Monday and Tuesday, little of note happened in the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , as investors looked to high-ranking Federal Reserve officials for some indication of how long quantitative easing measures will continue. But today the Big Cheese himself, Chairman Ben Bernanke, spoke to the Senate about the central bank's plans. While remaining evasive about specifics, Bernanke indicated the Fed would continue its current stimulus efforts -- that is, until the labor market improves. Ironically fearing the prospects of lower unemployment, the Dow lost 80 points, or 0.5%, to close at 15,307. 

Ending Wednesday as the Dow's top performer, Pfizer (NYSE: PFE  ) rallied 1.8% on news the company will move to divest from its majority stake in animal health business Zoetis. Shareholders applauded the decision that will allow Pfizer to focus more on its core strength of developing drugs for, you know, humans. Shareholders will have the option to trade in their Pfizer holdings for a stake in Zoetis, but at a discount.

Home Depot (NYSE: HD  ) shares gained 1.3% after ending with healthy gains yesterday on an upbeat earnings report. While today's run may have something to do with that success, it probably had more to do with the woes of its competitor. Lowe's announced results of its own today, making Home Depot's competitive strength known. Lowe's grew profits by less than 3%, while Home Depot's surged nearly 20%. Yikes.

After hitting 52-week highs in the morning, chemical giant E.I. du Pont de Nemours (NYSE: DD  ) closed 1.4% lower today as shares sagged with the broader market. The $50 billion company has seen 23% gains this year as its stock remains attractive for value and dividend investors. With shares trading at a P/E below 12, offering a 3.2% annual payout, and DuPont boasting an intimidating intellectual property portfolio, today's slip could present an opportunity.

Cisco Systems (NASDAQ: CSCO  ) shed 2.8% Wednesday to end as the index's worst performer. After experiencing a 12% pop in a single day last week when earnings blew the market away, Wall Street's expectations are coming back down to earth. For long-term investors, today's slump is just a bump in the road. Cisco clearly remains a leader in information technology and is in an enviable position as the growth of cloud computing presents new opportunities for growth.

Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool's premium report. Click here now to get started.


Read/Post Comments (0) | Recommend This Article (12)

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: 2448215, ~/Articles/ArticleHandler.aspx, 9/21/2014 2:11:44 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