Early gains turned into late-day losses on Wall Street today, and increasingly, it looks as though investors won't be satisfied until they finally get word from the Federal Reserve about its next course of action. Given that the Fed's Open Market Committee doesn't have its next two-day meeting until next Tuesday, investors will have another week to wait before they get any definitive word from the Fed on whether it will taper off on its bond purchases under its quantitative easing program. Bonds also weakened, with rates rising above the 2.2% mark on the 10-year Treasury. By the close, the Dow Jones Industrials (^DJI 0.77%) had sunk all the way below the 15,000, falling 127 points, and the broader stock markets posted similar percentage losses.
Nevertheless, there were a few bright spots within the Dow. As I mentioned earlier today, Hewlett-Packard gained almost 3% on more positive comments from CEO Meg Whitman about the company's pace of recovery. Other than HP, most of the gains were minor but still impressive given the overall market's decline. Microsoft (MSFT 1.58%) rose half a percent despite facing some controversy over its decision to price its Xbox One gaming console at $499, $100 higher than the rival PlayStation 4. Still, one argument favoring Microsoft is that it has almost become a defensive play, with its software products retaining their strength over the industry despite persistent competitive threats. The stock's jump over recent months has made it less of a value play, but if you give Microsoft any credit for growth prospects, then its valuation still looks reasonable.
A pair of stocks weighed in with single-penny gains on the day. McDonald's (MCD -0.19%) has found itself at the center of a new innovation battle in fast food, as both it and its competitors have moved to introduce new menu items and expand hours for breakfast and other offerings. Willingness to innovate helped McDonald's post a 2.6% same-store sales gain in May, with increases in Europe and the U.S. being particularly well-received.
Finally, Pfizer (PFE 0.30%) rose on news that Teva Pharmaceuticals (TEVA -0.23%) and Sun Pharmaceutical would pay Pfizer and Takeda Pharmaceutical a total of $2.15 billion to settle a patent-infringement dispute stemming from generic-makers Teva and Sun having chosen to copy a Takeda drug licensed to Pfizer's Wyeth unit before the patent on the drug expired. The news underscores the importance of patent protection for drugmakers, protecting the intellectual property rights that produce so much of drug companies' value.
