The Dow Seeks Another Record as Pfizer, Financials Shrug Off Setbacks

Investors didn't let a few negatives facing Dow Jones Industrials stocks hold the average back Tuesday.

May 27, 2014 at 11:00AM

The Memorial Day weekend didn't halt the positive momentum of the Dow Jones Industrials (DJINDICES:^DJI), which were up 75 points as of 11 a.m. EDT, about 35 points shy of joining the S&P 500 in setting a record high. Unexpectedly strong economic data showed better gains in home prices than expected in March, along with positive readings on durable-goods orders and consumer confidence. The resulting favorable sentiment among investors was enough to offset disappointing news from Pfizer (NYSE:PFE), Goldman Sachs (NYSE:GS), and JPMorgan Chase (NYSE:JPM), whose shares nevertheless rose Tuesday morning.


The end of Pfizer's bid for British drugmaker AstraZeneca was bittersweet, as the stock rose nearly 0.5% despite the company choosing not to pursue a merger. With U.K. securities rules now requiring that Pfizer not make another bid for at least six months, the big question facing investors in both companies is whether the deal is truly off or whether Pfizer will work with its target candidate to come up with an acceptable offer. For Pfizer, the stakes are huge, as current U.S. tax laws mean it would get a major boost by moving its tax home to Great Britain, along with the other advantages that Pfizer identified from economies of scale and cost-saving synergies. Nevertheless, Pfizer shareholders recognize that paying too much for the deal could be worse than not getting a deal done at all.


Meanwhile, JPMorgan Chase and Goldman Sachs both rose between 1% and 2% as the two companies were named in a lawsuit alleging price manipulation in the zinc market. The claims look eerily similar to what players in the metal-warehousing industry have had to address in the aluminum market, including rules that create backlogs of requests for physical metal delivery and unnecessary movements of metal between warehouse facilities. The news offers a possible justification for Goldman Sachs choosing to sell its Metro International Trade Services unit, which was also included in the lawsuit. Given the turmoil in the commodities markets over the past several years, metal buyers are putting as much pressure as they can on market participants like JPMorgan Chase and Goldman Sachs to make sure they're not doing anything to keep prices higher than absolutely necessary.

Whether or not the Dow Jones Industrials set a new record today, there's no doubt that the positive attitude among investors is encouraging for stock market bulls. Even as the market ascends, fundamental business strength could carry stocks further still in the months to come.

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Dan Caplinger owns warrants on JPMorgan Chase. The Motley Fool recommends Goldman Sachs. The Motley Fool owns shares of JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

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

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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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