Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
This morning the Department of Labor reported the unemployment claims for last week, and while the figure hit a seven-year low, the data is incomplete because two states may be having issues with updated computer software. The reported number is 292,000, down 31,000 from the previous week. But most market participants don't seem to think that will be the final number; the markets have hardly budged today.
As of 12:45 p.m. EDT the Dow Jones Industrial Average (DJINDICES: ^DJI ) is down 20 points, or 0.13%, while the S&P 500 and Nasdaq have declined 0.28% and 0.12%, respectively. The majority of the Dow's 30 components are in the red, so let's take a look at what's causing some of the bigger declines.
Shares of Hewlett-Packard (NYSE: HPQ ) are down 1.7% today on news that Michael Dell and Silver Lake Partners have received shareholder approval to take Dell (NASDAQ: DELL ) private. This is the final end of a drawn-out fight between Mr. Dell and a few large shareholders, and the company will now be able to undergo a restructuring outside of Wall Street's prying eyes. Most market participants believe a turnaround is easier to pull off without shareholders expecting growth and positive results each and every quarter. This is likely one reason HP is lower today, along with the fact that Mr. Dell and management will be able to focus on areas other than PCs, such as IT and servers.
JPMorgan Chase (NYSE: JPM ) is having another rough day, with shares down 1.6% this afternoon. Earlier this week the bank's CFO, Marianna Lake, said at an investor conference that JPMorgan could lose $15 billion in its bond portfolio if interest rates were to rise 2 percentage points. That's a shockingly large number; most investors still clearly remember the "London Whale" incident and how terrible that was at a $6 billion loss. The bank's bond portfolio could lose more than double that amount if rates rise too quickly and the bank can't dump the bonds.
The nation's largest natural-gas producer, ExxonMobil, (NYSE: XOM ) is down 0.8% today after the U.S. Energy Information Administration released data about U.S.'s natural-gas stockpiles today. The report indicated that supply rose 65 billion cubic feet last week, whereas analysts were expecting an increase of 67 billion cubic feet. But while the weekly increase came in lower than anticipated, the EIA reported that total stock of natural gas is now at 3.25 trillion cubic feet -- about 46 billion cubic feet higher than the five-year average of 3.21 trillion cubic feet. Furthermore, there are no signs of any drilling disruptions in the Gulf of Mexico, and the autumn natural-gas slump is coming on, as consumers will need neither AC nor heat for a while. Therefore the price of gas could sink still lower.
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