The Dow Holds Its Breath Below 15,000

After a big decline of more than 200 points yesterday, the Dow Jones Industrials (DJINDICES: ^DJI  ) has spent the morning trading in a narrow range as investors wait for tomorrow's news on the U.S. employment picture. Although today's data included a drop in weekly unemployment claims that would ordinarily have spurred some optimism about tomorrow's report, investors aren't sure whether to root for a strong jobs report that would point to a healthier economy or for a weak report that would increase the odds of further accommodation from the Federal Reserve. That uncertainty kept the stock market near breakeven, with the Dow down two points as of 10:55 a.m. EDT.

But some stocks are bouncing back for shareholders. Home Depot (NYSE: HD  ) has risen 2.2% after getting hit hard in recent days. Rising interest rates have made their way into the mortgage loan market, and that has investors fearing a potential reversal in the substantial home-price gains that the housing market has seen over the past year. Yet reports yesterday that private-equity company Kelso might try to sell off its Custom Building Products home-furnishings and construction manufacturer might have reminded investors that Home Depot might benefit from a potential IPO of its former HD Supply unit, in which it still retains a 12.5% stake.

In order to face the uncertainty in the economy, many companies have sought to restructure their internal businesses to boost efficiency and save on costs. Procter & Gamble (NYSE: PG  ) came out yesterday with its expected reorganization plan, under which the company will divide into four divisions focusing on beauty, fabric and home care, health and grooming, and family care products. P&G also chose leaders for those divisions, and those leaders are all among the top candidates to take over for newly appointed CEO A. G. Lafley when he re-enters retirement. Given P&G's struggles in maintaining its leadership role in the consumer products industry, investors have to hope that the reorganization will create more of a sense of internal competition and urgency to improve results. The shares have risen a modest 0.1%.

Finally, outside the Dow, merger and acquisition rumors helped send SodaStream International (NASDAQ: SODA  ) up as much as 30% in premarket trading, but that gain has since been reduced to 5%. Before the market even opened, PepsiCo (NYSE: PEP  ) CEO Indra Nooyi denied rumors that the company was considering buying the home-carbonation system manufacturer, but even after the denial, the stock opened as much as 10% higher before falling back to current levels. The episode proves that anyone who believes markets are efficient hasn't seen the stock market in action, as the stock-price action indicates delays in who saw various pieces of information at what time.

SodaStream's carbonation technology sounds simple, but this razor-and-blade company offers an intriguing opportunity for growth that could well disrupt the soda industry. The Motley Fool's premium report on SodaStream explains the opportunities, as well as the risks, that the company presents. The report comes with a year's worth of updates, so just click here to get started.


Read/Post Comments (1) | Recommend This Article (2)

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.

  • Report this Comment On June 06, 2013, at 12:43 PM, LadyMantle wrote:

    With debt percentage to GDP being at an all time high and interest rates rising, many on Wall Street are not seeing growth in futures right now.

Add your comment.

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: 2475476, ~/Articles/ArticleHandler.aspx, 9/20/2014 10:05:36 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