It's a tough day for the Dow Jones Industrial Average (DJINDICES: ^DJI ) . Though the index hasn't fallen sharply, down 74 points with only four component stocks in the green as of 11:45 a.m. EDT, there's little momentum building to help it get back to breakeven. Given some mixed economic news and conflicting reactions to earnings reports, investors may be at a loss with what to make of today.
It's not all bad
The latest jobless-claims report came out this morning, showing a small increase in the number of new claims filed for unemployment benefits to a seasonally adjusted 343,000. Though that was more than economists had expected, seasonal shutdowns at manufacturing plants and school summer vacations make the month of July difficult to estimate.
Despite the 7,000-claim increase last week, investors shouldn't be concerned that the gains in the labor market are slipping away. With the closures mentioned above, the week-to-week variations typically seen during the summer don't signal a return to higher rates of job cuts. Though it is slow to gain traction, the labor market is continuing to improve, and it may see more hiring later in the year once the impact of governmental spending cuts has passed its peak.
Despite the news this morning that orders for durable-goods increased 4.2% in June, Caterpillar (NYSE: CAT ) is down 2% following a truly disappointing earnings report. The company has seen continued declines in revenue compared to the prior year, so a new trend of higher demand for durable goods should have been a sign to investors that Caterpillar could see some new buyer activity here in the States. But low commodities prices and signals from China hinting at slowed manufacturing aren't helping the company gain confidence in the market.
Home sweet home
This week has been heavy with new housing data, and though the week started off with some mixed information, signs point to continued gains in the housing market. But you wouldn't really know that looking at some of the housing-centric stocks. Within the Dow, the Home Depot (NYSE: HD ) is down 2.3% so far today, perhaps hit by the decrease in existing-home sales reported on Monday. However, investors should recognize that the company is involved in the housing market beyond just renovations. As homebuilders and other contractors gear up for new construction, Home Depot will be alongside to help supply the materials.
Speaking of homebuilders, PulteGroup (NYSE: PHM ) and rival D.R. Horton (NYSE: DHI ) aren't getting any love this morning either, down about 9% and 7%, respectively. Though the sale of new homes in June rose more than 8% from May, signaling a huge jump in buyer demand, the inventory of new homes is nearly half of what economists would view as a good balance between supply and demand. Though the recent data indicates demand for new homes, the two companies are seeing red this morning due to quarterly results. Pulte missed earnings expectations and reported a 12% drop in new booked homes for the second quarter. Horton, on the other hand, reported better-than-expected earnings after it sold homes at higher prices -- but that failed to impress investors.
Lesson of the day
Conflicting data and reactions can make the market difficult to navigate on a day like today. But for long-term investors, focusing on core business opportunities and longevity can help clear up some of the fog. Keep your investing objective in mind and look for news that will truly effect your investments, rather than trying to take it all in.