Dow Jumps 100 Points, But Is It Another Head Fake?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Stocks jumped out of the gate this week as two strong economic reports and hopes the market would get what it wanted from the Fed in its interest rate decision on Wednesday had the Dow Jones Industrial Average (DJINDICES: ^DJI  )  more than 1% most of the session. However, it faded late to finish up 110 points, or 0.7%.

This month's Empire State Manufacturing report came in well ahead of expectations, hitting 7.8 on expectations of just 0.8, improving from -1.4 in May. Markets also received a push from the National Association of Home Builders Market Survey, which topped 50 for the first time since April 2006, indicating that a majority of homebuilders view the housing market favorably. That hasn't happened in more than seven years. The index reached 52, way better than expectations at 45, and better than 44 last month.

Still, the market seemed mostly propelled by hopes that the Fed would keep its current bond-buying program in place as its Open Market Committee begins a two-day meeting tomorrow. The Fed will reveal the results Wednesday at 2 p.m., when it announces the benchmark interest rate, which is expected to hold at 0.25%, and provides its current view of the economy.

Cisco Systems (NASDAQ: CSCO  ) led Dow stocks today, finishing up 2.5% to hit a new 52-week high. The networking specialist first announced that it has opened an innovation center in Israel along with local telecom Pelephone to develop new technologies to meet growing demand for mobile data services, and unveiled a project called "Connected Boulevard" in Nice, France. The project is a prototype, which hopes to aid cities in areas such as parking traffic, street lighting, and waste disposal. Cisco also benefited from an overall strong day for tech stocks as Advanced Micro Devices jumped 2.8% and Micron Technology finished up 3.8%.

Not all Dow stocks were winners today, though, as Verizon (NYSE: VZ  ) shares finished down 0.7% after expressing interest in an acquisition north of the border. According to The Globe and Mail, Verizon is looking into purchasing Wind Mobile, a smaller telecom in Canada. Wind has already received offers from other interested, but unidentified, parties. The deal would give Verizon an inroad into the Canadian market of 30 million, but perhaps investors would rather see it buy out Vodafone's 50% stake in its wireless division.

Finally, Netflix (NASDAQ: NFLX  ) shares finished up 7.1% after reporting an agreement with DreamWorks Animation (NASDAQ: DWA  ) . According to the deal, Netflix will offer original programming from the animation house starting in 2014, which it said was the biggest deal it's made for first-run content. The move is the video streamer's latest coup after releasing House of Cards to critical acclaim and more recently resurrecting Arrested Development and seeing its stock price triple this year. Financial terms of the deal were not disclosed.

The tumultuous performance of Netflix shares since the summer of 2011 has caused headaches for many devoted shareholders. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why The Motley Fool has released a premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. The report includes a full year of updates to cover critical new developments, so make sure to click here and claim a copy today.

Read/Post Comments (3) | Recommend This Article (0)

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 18, 2013, at 12:21 AM, pinguinobc wrote:

    "But is it another head fake?" I thought you were going to address (and maybe even answer) this question.

  • Report this Comment On June 18, 2013, at 1:08 AM, chris293 wrote:

    Head fake and he takes the ball to the basket and all his change falls on the floor. The winner is the one who shoots from one position and doesn't waste time running all around the court. Time always pays some buy and hold positions as shown by positive results with great dividends.

    True, I have been stupid in selling some dividend stock, but I hoped for and seem to be getting better return percentagewise with a few new stocks in the exchange. As for the DOW, slow and sure heading up until the next bubble.

  • Report this Comment On June 18, 2013, at 12:38 PM, TMFHobo wrote:

    Is it another head fake? In short - yes - this was the fifth day in a row the Dow's moved more than 100 points - all on the some hunch on the Fed..I'd say you can ignore it.

    -Jeremy Bowman

Add your comment.

Compare Brokers

Fool Disclosure

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: 2494472, ~/Articles/ArticleHandler.aspx, 9/30/2016 3:08:52 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...

Today's Market

updated Moments ago Sponsored by:
DOW 18,338.01 194.56 1.07%
S&P 500 2,172.85 21.72 1.01%
NASD 5,320.87 51.71 0.98%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 2:53 PM
^DJI $18336.98 Up +193.53 +1.07%
CSCO $31.70 Up +0.31 +0.99%
Cisco Systems CAPS Rating: ****
DWA $40.97 Down +0.00 +0.00%
DreamWorks Animati… CAPS Rating: ***
NFLX $99.17 Up +2.50 +2.59%
Netflix CAPS Rating: ***
VZ $52.03 Down -0.09 -0.17%
Verizon Communicat… CAPS Rating: ****