The Dow Jones Industrial Average (DJINDICES:^DJI) quickly fell more than 117 points this morning, after the Senate failed to pass bills that would have stopped the $85 billion in automatic government spending cuts, known as the sequester, from going into effect today. But because of some positive economic numbers, the bears couldn't hold the markets down.
This afternoon, the Dow rallied, closing the day up 0.25%, followed by the S&P 500, which gained 0.23%. Most market participants are claiming that the stronger-than-expected ISM manufacturing numbers gave the bulls a reason to forget about the possible future problems caused by the sequester.
The Dow's downers
Unfortunately, not all of the Dow's components ended the day on a positive note. Shares of both of the index's major energy stocks closed down.
Chevron (NYSE:CVX) lost 0.21%, while ExxonMobil (NYSE:XOM) dipped lower by 0.13%. The moves were likely caused by the U.S. Energy Department's weekly report on U.S. crude inventory levels, which came out this afternoon. The report showed that inventories rose by 1.13 million barrels, marking the sixth straight weekly rise.
The stockpiles continued climbing this week because of increased imports even as domestic production fell and demand increased. Current crude supplies in the U.S. are 9.4% higher than they were at this time last year, and if inventory levels continue to move higher, crude prices will likely fall, causing lower profits for the major oil players.
Shares of Cisco Systems (NASDAQ:CSCO) lost 0.12% today. Lately, the company has been losing favor against smaller, faster-growing, competitors such as Palo Alto Networks (NYSE: PANW). The latter operates in the network security hardware industry and competes with Cisco and Juniper Networks.
Palo Alto recently posted quarterly revenue growth of 70% year over year and expects growth of 52% to 58% in the coming quarter. Cisco can no longer offer investors that kind of rapid growth, and FBR Capital Markets analyst Daniel Ives believes Palo Alto will "continue to gain market share in the overall network security market from the larger incumbents."
Today McDonald's (NYSE:MCD) announced that it was cutting two items from its menu, causing investors to cut the stock price by 0.23%. The king of fast food will no longer offer the Chicken Selects or the Fruit & Walnut Salad, and it's considering removing the Angus burgers from its menu as well. A number of McDonald's franchisees favor the cut. According to the Associated Press, one former owner feels the menu has become too broad, causing no one item to sell in massive quantities. More importantly, though, this move may disappoint customers, and even cause some to stop eating under the Golden Arches.