It took a while, but the Dow Jones Industrials (^DJI 1.34%) finally warmed up to the start of earnings season by rising 60 points and setting a new all-time record high. Yet even though anxiety about the huge bull-market run that stocks have enjoyed since 2009 has some investors considering whether they ought to take profits and run, today's market action shows a surprising dynamic that is a big shift from more normal investor behavior.
Ordinarily, with markets at new highs, worried investors would bid up shares of consumer giants. Yet many of the Dow's top consumer companies finished lower today. Procter & Gamble (PG -0.28%) fell two-thirds of a percent, while Coca-Cola (KO -0.27%) backed off a 52-week high to finish lower by 0.4%. Both companies generally have defensive characteristics that worried investors typically like, as their businesses aren't very sensitive to changing economic conditions, and they sell products that have relatively inelastic demand. Yet both stocks trade at above-market valuations, and recent concerns about Coke's sales-volume challenges and P&G's product miscues have conservative investors feeling less secure about their ability to withstand a market reversal.
Meanwhile, it was tech stocks -- far from the usual favorite among defensive investors -- that finished with huge gains. Although the Dow's tech components can point to news to justify part of their gains, investors are also gravitating to their cheap valuations as providing a margin of safety in the event of a future downturn.
McDonald's (MCD -0.99%), also a defensive favorite, had its own problems today, falling from new highs to end down 0.4%. For the fast-food giant, an outbreak of bird flu in China could lead to reduced numbers of customers in the emerging nation, which has been an important part of the McDonald's growth story in recent years. Reported price cuts could help, but they might also merely exacerbate sales declines by trimming margins and leading to further weakness.
Finally, American Express (AXP 3.46%) fell more than half a percent after the European Commission said it's looking at a couple of card networks that target the continent to see if there are anticompetitive practices involved in the fees they charge and the agreements they have with merchants. AmEx wasn't specifically mentioned, but given its growth ambitions, it faces many of the same issues as its rivals and could potentially face the same issues that the EC mentioned.