After a weak jobs report this morning, it seemed as if the markets were headed south... way south. But, slowly, stocks began turning around, and the major indexes followed along. Finally when the closing bell rang for the day, the Dow Jones Industrial Average (^DJI -0.11%), the S&P 500 (^GSPC 0.02%), and the Nasdaq were all higher for the day. At their lows, the Dow was down 0.44%, the S&P was off by 0.35% and the Nasdaq was down 0.32%; but when the day's trading session was over, the blue chip index had risen 30 points, or 0.19%, while the other two were up 0.16% and 0.38%, respectively. Additionally, after making these moves today, the Dow and S&P 500 once again set new all-time record highs, as the Dow now sits at 15,658, and the S&P at 1,709.
This morning's jobs report for July was the main culprit of the early-hours decline, as the Labor Department reported only 162,000 new jobs were added, while economists had been expecting 185,000 jobs last month. May and June's results were also revised lower by a total of 26,000 jobs for the two months, and July's results were actually the worst we've seen in the past four months. Furthermore, while we did experience a decline in the unemployment rate to 7.4%, we also realized a decline in the workforce participation rate during the month, which likely indicates that the "real" unemployment rate is still rather elevated.
Despite the index pulling out a late day win, 12 of the Dow's components still ended the session in the red. This afternoon, I explained why Chevron, ExxonMobil, IBM, and Bank of America were all lower. You can read about them by clicking here, or stick around to learn about a few of the Dow's other losers of the day.
Coca-Cola (KO 1.50%) declined by 0.86% today. A number of things have been going wrong for Coke over the past few weeks, and today's decline is probably just a combination of these troubles all hitting at once. Competition from the environmentally friendly Soda Stream is surely playing part of Coke's pains. Because the company reported weak second-quarter earnings, and blamed the weather for the less-than-stellar results, we should all be able to agree the do-it-yourself soda machine may be hurting Coke's sales. But while Pepsi didn't have the best quarter, and what was saved was due largely to its snack food business, management wasn't making poor excuses as to why results did wow investors. Lastly, Coke's growth here and abroad doesn't look as if it will increase rapidly anytime soon, as second quarter GDP in the U.S. was a measly 1.7%, Europe is still in trouble, and the Chinese government is actually trying to slow its economy by imposing limits on production.
Despite posting better-than-expected results yesterday, shares of Procter & Gamble (PG 0.68%) declined by 0.43% today. The company was expected to produce revenue of 20.55 billion and earnings per share of $0.77, but reported sales of $20.65 billion, and EPS of $0.79. But, now that the earnings beat excitement has worn off, and investors realized the company's guidance for the remainder of the year was $4.25-$4.33 per share, while analysts were looking for $4.32, some of yesterday's 1.7% share price gain was given back today.
Shares of UnitedHealth (UNH 0.23%) slide lower by 1.23% this afternoon. The stock is up more than 33% in 2013, while the Dow has only risen 19.49%, so even after today's pullback, investors are still ahead of the market today. Today's decline came on very little news pertaining directly to the company; but, as the markets continue to creep higher each day, and continued uncertainty surrounds the health-care industry as a whole, investors may slowly trade out of UnitedHealth and into companies that have less uncertainty about the future earnings potential surrounding them.
