Just yesterday The Wall Street Journal highlighted the fact that because the Social Security tax reverted back to its traditional rate of 6.4%, Americana are taking home less of their hard-earned money while more of it goes to the government. Today the U.S. government reported that there was a 0.2% drop in monthly producer prices, while retail sales gained 0.5% during the month of December. These numbers would indicate that the U.S. economy is back on track, but the real test will be January's and February's readings, now that American's have less to spend every month.
Investors don't seem to care much about these economic indicators today: The major indexes are flat. As of 12:55 p.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) is down three points to 13,504. The S&P 500 is down a fraction of a point, and the NASDAQ is the worst performer of the three, down 0.24%.
So why are they down?
Shares of American Express are down 0.75% after Goldman Sachs downgraded the company from "buy" to "neutral" yesterday, but the stock actually gained 0.7% during yesterday's session. Perhaps some market participants were just late to see that news.
Hewlett-Packard is trading lower by 3% today, making it the Dow's worst-performing stock thus far. The personal-computer and printer manufacturer was upgraded yesterday by an analyst at JPMorgan, and the stock rallied more than 3%. But, as you can see, the stock has given back nearly all those gains as investors likely realized the spike was overblown.
Shares of McDonald's are down 0.31% after a report out of China stated that the Chinese government will pay cash rewards of $48,200 to anyone who blows the whistle on violations of food safety laws. This is part of the Chinese government's response to the country's persistent food health problems. The most recent and high-profile incident involved the American fast-food chain KFC, owned by YUM! Brands (NYSE:YUM). KFC had some issues with its chicken supplier, and it was later reported that the supplier of both KFC and McDonald's was using growth hormones.