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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.
The stock market's behavior today is a good example of how investor sentiment can turn on a dime. After huge amounts of enthusiasm in the wake of the Fed's decision not to clamp down on its bond-buying program, investors turned into doomsayers today, pointing to a political confrontation over Obamacare, and the federal budget, as reasons to reverse course. The Dow Jones Industrials (DJINDICES: ^DJI ) plunged 185 points, giving back the majority of its gains for the week, but still hanging onto a half-percent weekly rise. Losses were somewhat concentrated in the Dow, but broader markets also posted losses, with the S&P 500 falling three-quarters of a percent.
Only three Dow stocks managed to climb today. JPMorgan Chase (NYSE: JPM ) eked out a 0.1% gain, even as it faces yet more legal controversy. The bank now faces a possible class action lawsuit over allegedly revealing customer Social Security numbers on mailings to customers, exposing them to high risks of identity theft. JPMorgan Chase has had to deal with plenty of legal wrangling lately, with the Commodities Futures Trading Commission considering charges against the bank for trades in its London office. Settlements have been expensive for the bank, but it seems as though legal risk will continue for some time.
Coca-Cola (NYSE: KO ) managed a slightly bigger gain of about a quarter percent. Yet, the soft-drink maker appears to be facing regulatory threats, not just in the U.S., but elsewhere in the world, as well. As Fool contributor Asit Sharma noted earlier this week, backlash against Coca-Cola in Mexico could lead to a tax there on sugar-laden drinks. That would leave Coca-Cola's strategic vision in question, as the company has counted on emerging markets to take up the slack for falling volumes in its U.S. market. If health concerns start rearing up worldwide, Coca-Cola could have trouble producing substantial growth anywhere.
Pfizer (NYSE: PFE ) managed to do best of all Dow stocks, rising nearly half a percent. With the company having spun off animal-unit Zoetis (NYSE: ZTS ) , Pfizer is now free to concentrate on its core pharmaceutical business, which it hopes will be better able to propel it forward in the future. Zoetis arguably has the more promising future, though, with its $16 billion market-cap leaving Zoetis plenty of room to give investors a steeper growth trajectory going forward. But Dow investors often prefer high dividend yields, and there, Pfizer has a huge edge over Zoetis, with yields of 3.4% and 0.8% respectively. If the drugmaker is better able to get promising drug candidates through its pipeline as a slimmed-down corporation, while leaving its animal-health unit to pursue its own opportunities, then the spinoff will have made sense for investors in both businesses.
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