Jobs Send the Dow Soaring Past 17,000, But Why Are Johnson & Johnson and Coca-Cola Falling?

The Dow Jones Industrials (DJINDICES: ^DJI  ) reached a new milestone Thursday, soaring above the 17,000 mark as investors celebrated an unexpectedly large boost in U.S. nonfarm payrolls and a sizable drop in the unemployment rate. With the economy creating 288,000 jobs last month and unemployment falling to 6.1%, investors got the message that the recovery is still on course, and a rise in bond yields showed expectations that the Federal Reserve will acknowledge that fact by raising interest rates in the not-too-distant future. Yet even though the Dow was up 67 points as of 11 a.m. EDT, several index components lost ground, with Johnson & Johnson (NYSE: JNJ  ) and Coca-Cola (NYSE: KO  ) among the worst performers this morning.

Source: Johnson & Johnson.

Johnson & Johnson fell 0.7% as investors weighed the potential impact from further liability connected to hip implants from the company's DePuy subsidiary. Yesterday afternoon, Johnson & Johnson settled a dispute with the state of Oregon over alleged deceptive marketing claims related to the implants, which were recalled after patients complained that the new metal-on-metal design caused unintended negative consequences. The settlement includes a $4 million payment to the state government, and although that's inconsequential compared to the roughly $2.5 billion that Johnson & Johnson expects to pay to resolve patient lawsuits, the threat of other state and federal government investigations could lead to further payments and hurt J&J's reputation among consumers and medical professionals.

Coca-Cola declined by almost half a percent. Putting the move into context, the beverage giant has recently climbed to its best levels in a year, as investors start to feel more confident that Coca-Cola has a long-term strategy to get itself back on a higher-growth trajectory. In particular, Coca-Cola's developing relationship with Keurig Green Mountain has the potential to push both companies into new directions, with the possibility of making Coke products at home through Keurig's planned cold-beverage system unlocking the door to new profit opportunities and changing Coca-Cola's entire bottling-based business model. With today's job gains pointing to better opportunities for growth in other industries, Coca-Cola is likely seeing investors become less defensive and shift money out of the beverage stock into higher-growth plays.

With the Dow Jones Industrials having reached 17,000, the next question for investors is whether the bull market has even more legs to advance further. As lofty as valuations have become, the blue-chip index appears to have the momentum to keep rising as long as the economy keeps growing at a reasonable pace.

Leaked: This coming device has every company salivating
The best investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not just how we buy goods, but potentially how we interact with the companies we love on a daily basis. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns, you will need The Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3017509, ~/Articles/ArticleHandler.aspx, 8/30/2015 6:23:31 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:55 PM
^DJI $16643.01 Down -11.76 -0.07%
JNJ $95.17 Down -1.05 -1.09%
Johnson & Johnson CAPS Rating: ****
KO $39.45 Up +0.18 +0.46%
Coca-Cola CAPS Rating: ****