Why the Dow's Not Bouncing Back Todayhttp://www.fool.com/investing/general/2013/08/16/why-the-dows-not-bouncing-back-today.aspx Dan Caplinger
August 16, 2013
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.
Throughout much of the bull run in the stock market, investors could expect declines like yesterday's 225-point drop to give way to a quick bounce on subsequent days as favorable economic data or other market-moving news helps bring a more optimistic tone back into the market. Today, though, we haven't seen much evidence of that sort of response. According to preliminary August figures, consumer sentiment dropped more than five points, offseting any comfort from a nearly 6% jump in housing starts during July. As of 10:45 a.m. EDT, the Dow Jones Industrials (INDEX: ^DJI) are up just 12 points, regaining less than a tenth of their drop from yesterday and leaving the average poised for an almost 2% drop for the week.
Reflecting the dour mood was Alcoa (NYSE: AA), which fell more than 1.5% on an analyst downgrade. With the company having announced earlier this week that it will permanently close one of its potlines at a New York plant and temporarily cut production at several smelters in Brazil, it's evident that Alcoa still faces substantial pressure from weak aluminum prices and poor prospects for future demand. The moves are designed to reduce Alcoa's overall costs,