The stock market is slipping after the Organization for Economic Cooperation and Development cut its outlook for global growth. As of 1:25 p.m. EDT the Dow Jones Industrial Average (DJINDICES:^DJI) is down 123 points, or 0.8%, to 15,287. The S&P 500 (SNPINDEX:^GSPC) is down 0.78% to 1,647.
There were no U.S. economic releases today. The OECD now believes global growth will be 3.1% in 2013, down from its earlier forecast of 3.4%. It revised its 2014 growth forecast downward from 4.2% to 4%. The biggest reasons for the drop are the eurozone and Chinese economies. The OECD now expects the eurozone to shrink by 0.6% in 2013, worse than its previous prediction of a 0.1% contraction. In China, the OECD expects the economy to grow just 7.8% this year, down from a previous projection of an 8.5% gain. As many U.S. companies now get nearly 50% of their revenue from abroad, the effects of slower global growth are quickly felt, which is why the stock market is down today.
Today's Dow leader
Today's Dow leader is Hewlett-Packard (NYSE:HPQ), up 1.3% to make it one of just four Dow stocks up for the day. HP and other PC stocks got crushed in April when IDC announced that PC shipments declined year over year by 14%, the worst drop in history for the PC market. Yesterday, IDC announced that it now expects PC sales to decline by only 1.2% next year after a dismal drop of 8% this year. The company expects that sales will slow less as Microsoft makes changes to Windows 8 and stops supporting Windows XP next year, prompting companies to upgrade to Windows 8 and buy new computers at the same time.
Second for the Dow today is Bank of America (NYSE:BAC), up 1% after Moody's upgraded the banking system from "negative" to "stable." Later this week Bank of America goes to court over whether or not its $8.5 settlement with 22 institutional investors was reasonable. If the court decides the settlement was not appropriate, the bank could be on the hook for a larger penalty over Countrywide, as well as a long court battle.
Third for the Dow today is Cisco (NASDAQ:CSCO), up almost 1%, making it a top-three Dow stock for the second day in a row. Today Cisco announced that it is acquiring JouleX for $107 million. Cisco is a serial acquirer that has fended off being disrupted by continuously making small acquisitions of promising upstarts. JouleX automates energy management for enterprise customers running large networks in an effort to "reduce energy consumption and realize cost savings." There is lots to like about Cisco, including a low valuation, a 2.9% dividend, and more than $6 per share of net cash.
Dan Dzombak owns shares of Bank of America and Cisco Systems. The Motley Fool recommends Cisco Systems. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.