Once again, the tug-of-war between a troubled Europe and improving conditions in the U.S. played out in the stock market today, as markets plunged early but managed to recoup most of their losses by the end of the day. What's increasingly clear is that the situation in Cyprus will continue to be volatile for a while, but the bigger concern is whether larger economies will take the wrong message from the Cypriot bailout. Rising bond yields in Italy and Spain reflect that uncertainty, but U.S. markets proved their resilience once more in looking past Europe's mess to solid economic news domestically. By the close, the Dow Jones Industrials (^DJI +1.24%) were down just 33 points, and broader markets were even more narrowly mixed, with the Nasdaq actually rising on the day.
Helping to pull the Dow off its lows was Microsoft (MSFT +0.66%), which gained 0.75% on reports that it is looking to sell its Mediaroom Internet-protocol television unit to Ericsson. The companies didn't confirm the report, but with Microsoft looking to focus on delivering content through its Xbox platform, the unit could arguably be an extraneous part of its overall business strategy.
UnitedHealth Group (UNH +0.94%) was the biggest gainer in the Dow, rising 1.75% on optimism that much-feared cuts of Medicare Advantage reimbursement rates might get rescinded. A complex calculation involving the interplay between physicians' pay and Medicare Advantage plans arguably gives the Medicare program the ability to reverse the proposed reimbursement-rate reductions. Given the importance of the plans to UnitedHealth, the move could make a big difference to its bottom line.
Beyond the Dow, Mattress Firm (NASDAQ: MFRM) bounced 12% higher after reporting earnings last night. Despite charges related to an acquisition and a drop of 1.6% in same-store sales, the mattress company gave positive revenue guidance and argued that the newly acquired stores would help drive greater profits for the company. Given the big hit the industry took this time last year, the rebound in mattress companies is a sign of how housing-related stocks are benefiting from rising home prices.
Finally, Diana Shipping (DSX 1.10%) sailed higher by 13%, hitting a new 52-week high as renewed calls from Jim Cramer that the shipping industry has hit bottom lifted the stock. Given how far the industry has fallen, with the Baltic Dry Index still at less than a tenth of its peak levels, even the whiff of good news has been enough to inspire long-suffering investors to hope for a turnaround.
