Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Stocks have stumbled here in the afternoon trading session as the Dow Jones Industrial Average (DJINDICES:^DJI) has shed its earlier gains. The Dow's hanging flat as of 2:15 p.m. EST, with the blue chip stocks of the index split evenly between gainers and losers.
Strong economic data has helped the Dow's cause today, but Johnson & Johnson (NYSE:JNJ) hasn't found any traction so far, dropping around 0.3%, to rank among the Dow's leading laggards on what's been a day of modest movement for stocks. Let's catch up on what you need to know.
A mixed view on the U.S's economic rise
Declining jobless claims put a bounce in investors' steps early this morning, as U.S. jobless claims for the past week came in at their lowest level since September. That was offset by a fall in durable goods orders by 2% in October – however, that number came in to beat analyst expectations, which, on average, had projected a 2.2% decline.
The reports indicate that businesses still remain cautious about the U.S. economy's sluggish rise, but consumers are gaining steam. The University of Michigan and Thomson Reuters's poll of consumer sentiment jumped to a reading of 75.1 in November, up from October's 73.2 mark. That's much better than the economist projections and, while the Conference Board's own consumer confidence reading that came out earlier in the week fell for November, industries reliant on consumers -- especially retailers gearing up for the holiday season -- should like today's report.
Johnson & Johnson's down on the day with little news out for the company, but this stock's soared in 2013. Still, J&J has had one problem this year: The company's sales in the Asia-Pacific and Africa region have lagged behind all other regional sales, gaining just 2.2% over the first nine months of the year, and actually shedding 3.6% during the third quarter. Strong sales from Europe of all places – a region that's been slammed in the health-care market during its economic crisis – have helped J&J counteract its emerging market slump, but this company will need to invigorate its business in developing economies if it wants to see its best chance at growth.
Look no further than top rival and fellow diversified health-care giant Abbott Labs (NYSE:ABT) for an example. Abbott exploded into the emerging markets scene with its top-selling nutritionals business, which – despite a recent probe by Chinese regulators into the industry and a fine – has soared in China's thriving market. While Abbott's overall key emerging markets sales have gained only 1% through the year's first nine months, its pediatric international nutritionals sales have jumped 14% during that time, with adult nutritionals sales in international regions climbing 7%.
It's that kind of gain that Johnson & Johnson could use in divisions such as its medical device department, which has slumped after the synergies from the acquisition of orthopedics leader Synthes last year have worn off. Johnson & Johnson could realize a big boost, and emerging markets are where investors will need to watch in the near future at this health-care powerhouse.