What's Moving the Dow Other Than Cisco's Scare?

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.

On a day in which weather is a major factor on the East Coast, stock markets aren't making very dramatic moves, with the Dow Jones Industrials (DJINDICES: ^DJI  )  up nine points at 11 a.m. EST after dropping as much as 100 points just after the open. Despite fear from the latest negative outlook from Cisco Systems, other events are also contributing to the Dow's moves this morning.

On one hand, the onslaught of sluggish economic data continued today. Dow futures reacted when retail sales figures for January came in worse than expected, with a drop of 0.4% led by falling auto sales. Downward revisions in December also pointed to sluggishness, and although many people immediately blamed the weather, that doesn't explain why economists hadn't built weather impacts into their projections for roughly unchanged retail sales for the month. Outside the Dow, neither Ford (NYSE: F  ) nor General Motors (NYSE: GM  ) appeared to react to the report, given that they've already reported sales figures. But GM stock fell 1.7% on news regarding a recall of almost 780,000 compact cars, including its Cobalt model, due to safety concerns linked to ignition switch problems.

Yet investors have to be pleased at the relatively calm way in which the U.S. government this week resolved the latest round of the debt-ceiling debate, with the House and Senate agreeing to suspend implementation of the ceiling until early 2015.The measure doesn't officially set a new higher limit, but makes it possible for the government to operate without a shutdown. United Technologies (NYSE: UTX  ) and Boeing (NYSE: BA  ) , which have extensive defense contract relationships, should see their long-term prospects improve if Washington doesn't make things more difficult for them in the future.

When high-profile companies report big news, it's easy to get caught up in the story of the day. But keeping aware of other news items is essential to keep your balance and avoid knee-jerk reactions in your investing. Your long-term results will improve as a result.

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