There's never a lack of news to send the markets barreling up or plummeting down. The focus of traders' ire today is mixed news on the housing front and heightened social tensions in Europe. While the Dow Jones Industrial Average (DJINDICES:^DJI) started the day in the green, it has since largely meandered about in negative territory.
Housing and Europe weigh on Dow
A report (link opens PDF file) released this morning by the U.S. Census Bureau complicates predictions that a housing recovery has taken hold. While the data estimates that median home prices rose an impressive 17% in August on a year-over-year basis, it also suggests that sales of new single-family houses came in at a seasonally adjusted annual rate of 373,000. The latter figure was notably below the revised July rate of 374,000, but still well above the estimated 292,000 homes sold in August 2011. (As a side note, the margin of errors for these figures is large.)
The Census Department's report is the fourth update on housing released this week. The first two reports, released yesterday by Standard & Poor's and the Federal Housing Finance Agency, estimated that July housing prices increased 1.5% and 0.2%, respectively, on a month-over-month basis. And also released today was a survey by the Mortgage Bankers Association suggesting that mortgage purchase applications, as compared to refinance applications, were up 1% in the week ended Sept. 21.
Despite the good news on home prices, however, concerns about Europe are in the driver's seat. Anti-austerity strikes and protests in both Spain and Greece have degenerated into violence. This is leading many to question whether the continent's policymakers will be able to reach a compromise to save the countries before either is forced into default.
According to my colleague Alex Dumortier: "The demonstrations in Greece and Spain are a stark reminder that, while the European Central Bank may have a big bazooka, no amount of bond-buying firepower will solve the eurozone crisis. That is, and will remain, the province of European governments -- and so far, their ability to address the problem has not inspired much confidence."
The Dow's winners and losers
Among the companies heading higher today are Boeing (NYSE:BA) and Intel (NASDAQ:INTC). As I've discussed on separate occasions previously, shares in both have underperformed the broader market this year. Boeing is down 3.7%, while Intel's shares have fallen 4.8%. Today's gains may be an indication that these stocks have reached an inflection point.
With respect to Boeing, the aircraft manufacturer is currently embroiled in a dispute between the EU and U.S. governments involving the former's allegations that Boeing receives subsidies prohibited by the World Trade Organization. On top of this, its principal competitor, EADS -- the parent company of Airbus -- is seeking to merge with defense industry giant BAE Systems. The resulting combination would threaten Boeing in both the defense and commercial spaces.
Meanwhile, Intel is struggling to fight off lingering concerns from its recently downgraded forward guidance. Earlier this month, the chip maker tightened its revenue estimates and lowered the midpoint by 7.7%.
Alternatively, among the companies heading lower are oil giants ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), down 0.6% and 0.5%, respectively, in intraday trading. These declines are clearly linked to similar movements in the oil market. The price of West Texas Intermediate Crude is currently trading around $90 after spending time above $100 earlier in the year.
Foolish bottom line
Given the unpredictability of stocks, if you want to shield your portfolio from the increasingly volatile market, the best way to do so is by investing in strong, well-diversified companies that pay a respectable dividend. A handful of companies that fit this description are outlined in our recently released free report about three Dow companies every dividend investor needs. Simply click here to download your free copy of this report before it's too late.