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Why the Dow's Ignoring These Warning Signs

Dan Caplinger
July 30, 2013

In what has become a common occurrence, the stock market is once again flirting with all-time record highs, with the Dow Jones Industrials (INDEX: ^DJI) up 42 points as of 10:55 a.m. EDT. Yet what's surprising about the rise is that it comes on the heels of some economic news that points to cracks in the bull market's armor. Today's reading of the Case-Shiller home price index showed gains of just 1% in May after seasonal adjustment, falling short of expectations. Consumer confidence figures fell more than expected in July despite upward revisions to the index's June figure. And given how important the consumer and housing sectors have been in the U.S. economy's recent recovery, any signs of weakness should have a bigger downward impact on stocks than they appear to be having today.

The big winner on the day is Cisco Systems (NASDAQ: CSCO), up 2.3%. The company got a nice surprise when networking-security company Sourcefire (NASDAQ: FIRE) reported earnings last night, posting 29% year-over-year revenue growth and beating estimates for both top- and bottom-line growth. With Cisco having