Markets Show Weakness, but Bulls Continue to Buy

For the second day in a row, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) began the day down. Yesterday, the index dropped 127 points before closing the day down just 12. Today, it fell 95 points, but managed to close higher by 8.6 points. The morning dips have given those investors who have missed out on the market rally a chance to buy stocks, and hopefully make positive returns. These moves show two things: one, we're seeing some signs of weakness in the markets, and two, despite that, there are still investors willing to buy, which means stocks could continue to go higher.

Regardless of what the markets do, in general, if you continue to buy and hold strong healthy companies, over the next few years, you'll be better off -- even if the market falls in the coming months.

A few Dow losers
Verizon (NYSE: VZ  ) lost 0.96% today on very little news. But, the stock has now traded lower during four of the past five trading sessions, and with talks of a Sprint Nextel take over buy Dish Network again circling the markets this week, short-term investors could be bailing on the wireless provider due to fears that a stronger Sprint could pose a threat to Verizon's business. A combined Sprint-Dish combo would definitely threaten Verizon's Fios as well as other offerings and service packages.

Despite releasing the specs of its newest chip, shares of Intel (NASDAQ: INTC  ) lost 0.53% during today's regular trading hours. Investors and analysts may not be totally sold on the new Haswell chip line, which is supposed to consume 50% less energy when in "active" mode, and two to three times the battery life in "idle" mode than the Core chips. In the past, we have seen Intel attempt to become more relevant in the mobile chip market, but the company has yet to make any meaningful impact, which is likely the reason investors are not giving Intel the benefit of the doubt today. 

Shares of General Electric (NYSE: GE  ) also lost value today, losing 0.55%. Similar to Caterpillar, which I wrote about earlier today, General Electric was expected to rise today on news that manufactured goods orders rose 3.3%, but it was likely just pulled lower by the momentum of the market as a whole. Additionally, volume was slightly higher than usual at 41,000,000 shares trading hands, while the norm is only 38,900,000. What's even odder about today's loss is that initially, when the market opened, the stock was way down, but almost immediately spiked higher, just to fall back down again. Morgan Housel wrote earlier today about how American Electric Power and NextEra Energy experienced flash crashes yesterday when the market opened; perhaps General Electric's move this morning was the result of similar computer trading programs.

For GE, the recent financial crisis struck a blow, but management took advantage of the market's dip to make strategic bets in energy. If you're a GE investor, you need to understand how these bets could drive this company to become the world's infrastructure leader. At the same time, you need to be aware of the threats to GE's portfolio. To help, we're offering comprehensive coverage for investors in a premium report on General Electric, in which our industrials analyst breaks down GE's multiple businesses. You'll find reasons to buy or sell GE today. To get started, click here now.


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