Markets Move Higher With Fed Support

Johnson & Johnson moves higher with the sale of a unit, while Coke declines on a falling beverage volume report.

Mar 31, 2014 at 9:00PM
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The major indexes came on strong today as the Dow Jones Industrial Average (DJINDICES:^DJI) rose 134 points, or 0.82%, while the S&P 500 jumped 0.79% and the Nasdaq increased by 1.04%. The rally was spurred by Federal Reserve Chairwoman Janet Yellen's comments that the economy still needs extraordinary support and will need it for some time. That gave investors confidence that the Fed wouldn't stop stimulating the economy before it was strong enough to support itself.

Within the Dow, shares of Johnson & Johnson (NYSE:JNJ) rose 0.81% after the announcement was made that the company had accepted a $4 billion offer from The Carlyle Group, a Washington, D.C., private equity firm, for Johnson & Johnson's Ortho-Clinical business. The unit works with hospitals, blood banks, and labs supplying equipment and chemicals used to test blood for different diseases. J&J's CEO said the unit was sold because it didn't fit within the company's long-term strategy, which is to focus on businesses that are first or second in their respected markets.

 The Dow's biggest loser today was Coca-Cola (NYSE:KO), which lost 0.74%. The decline came after a report from Beverage Digest indicated that soda volumes fell 3% in 2013. The 8.9 billion cases sold was the lowest amount since 1995 and marks the ninth straight yearly decline. In 2012, volumes fell only 1.2% after dropping 1% in 2011, so the move away from sodas seems to be picking up steam as more consumers look for healthier options. Coke has a diverse product range, with things like bottled water, sports drinks, and fruit drinks, so I don't think investors need to flee just now. But in the long term, I would like to see the company continue to lessen its reliance on sodas and other unhealthy beverages.  

Outside the Dow, shares of BlackBerry (NASDAQ:BBRY) slid 3.92% after more analysts jumped on the downgrade bandwagon today. This morning it was Evercore and Credit Suisse that lowered BlackBerry's rating, dropping to "underweight" and "underperform," over concerns that the smartphone maker may not be able to continue creating meaningful business or slowing the contraction of its subscriber base. BlackBerry investors need to consider whether the risks of owning the stock outweigh the rewards. Can the company can turn things around? I'm not so sure.  

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Matt Thalman owns shares of Coca-Cola and Johnson & Johnson. The Motley Fool recommends and owns shares of Coca-Cola and Johnson & Johnson and has options on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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