Dow Closes Higher But Well Off Session's High

This morning, the Commerce Department released data showing that construction spending increased by 0.5% in May and hit a seasonally adjusted rate of $874.9 billion. While that surely looks impressive, especially when compared to April's 0.1% growth, analysts expected a higher growth rate as they predicted a 0.6% increase. But what most investors focused on were from the reports section on residential construction, which grew by 0.5% over April and was up 5.4% over May of last year.  

That positive report helped push the Dow Jones Industrial Average (DJINDICES: ^DJI  ) higher today. The blue-chip index was up as many as 174 points at one time during the day, but although it couldn't hold those gains, it still managed to closed the day up 65 points, or 0.44%. The S&P 500 ended the day up 0.54% while the Nasdaq closed up 0.92%.

Now let's take a look at a few of the reasons why the Dow couldn't hold on to that 174-point gain.

Shares of 3M (NYSE: MMM  ) slid lower today by 0.04%. The move came after the stock was downgraded by Morgan Stanley from an overweight rating to equal weight. The reason given for the downgrade was valuation, as the stock had risen 17.73% during the first six months of 2013. You may be wondering if the valuation is high, and my colleague Rich Smith tackled that question earlier today after hearing of the news. Rich believes that even though the company has a solid dividend yield of 2.3% and the stock's stated P/E is 17, he feels that it's trading closer to 20 times its actual annual cash profits, making the stock more expensive than it may seem.  

Microsoft (NASDAQ: MSFT  ) also declined today, losing 0.54% of its value. It was announced today that Microsoft's Don Mattrick, the man in charge of the company's Xbox unit, is leaving Big Softy to take over the CEO role at none other than Zynga (NASDAQ: ZNGA  ) . Before going to Microsoft in 2007, Mattrick worked for Electronic Arts. While at Microsoft, he turned the Xbox division into a profitable venture after a number of years in which the unit lost money. Not only did Xbox begin contributing to Microsoft's profits, but it became the No. 1 gaming unit in the U.S. under Mattrick's direction. This is a big blow for Microsoft while an incredible catch for Zynga. Mark Pincus, the founder and previous CEO, will remain as chairman and keep 61% of the voting rights of the company. Zynga rose 10.43% during the regular trading hours today and another 5.54% in the after-hours session.  

Lastly, shares of Merck (NYSE: MRK  ) lost 0.28% today after it was announced that federal regulators will not approve high doses of an insomnia medication that Merck is currently experimenting with. The reason for denying the approval was related to concerns about patient safety. At higher levels of the medication, patients in the testing group experience daytime drowsiness, trouble staying alert when behind the wheel of a vehicle, and suicidal thoughts. These are all typical side effects from sleeping medications, but Merck had aimed at reducing the severity of the morning-after fatigue.  

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