The Dow Jones Industrial Average (DJINDICES:^DJI) has dropped a slim nine points of 11:35 a.m. EST. Cisco (NASDAQ:CSCO) was underperforming its index, down almost 1% in morning trading. Meanwhile, Yelp (NYSE:YELP) posted a notable decline, while Sprint (NYSE:S) shares were surging.
New home sales disappoint
The numbers on new home sales for December came in worse than economists expected -- a seasonally adjusted 414,000 versus the anticipated 457,000. This figure, a 7% drop from November, suggests that the U.S. housing market isn't as strong as believed.
Nevertheless, Dow investors didn't seem to mind too much, keeping the blue-chip index from seeing the types of losses experienced by other major indexes fell on Monday. A more than 5% gain in shares of Caterpillar definitely helped, but traders may have been looking past Monday's data -- the Federal Reserve is set to discuss monetary policy this week, which could prove to be far more substantial.
Cisco hit by downgrade
Shares of Dow Jones component Cisco fell early on Monday following a downgrade from JPMorgan Chase from neutral to underweight. The bank also lowered its price target on Cisco from $21 to $17, arguing that the network specialist's emerging market exposure will weigh on shares as demand for its products falls.
Yelp tumbles as lawsuit goes to court
Yelp, meanwhile, was down nearly 5% early on Monday. The website has been an extremely volatile stock, so longtime investors should expect moves of such magnitude.
But Monday's slide may have been motivated by a lawsuit that will go to trial this week. A Washington, D.C. contractor sued a woman for $750,000, alleging defamation in relation to a review the woman posted on Yelp. That might not sound particularly substantial, but the outcome of the trial could undermine Yelp's entire business model: If reviewers fear financial retribution, they may stop leaving reviews on Yelp. Should that happen, Yelp could see its traffic fall substantially.
Sprint merger defended at T-Mobile
Sprint was up about as much as Yelp was down, as shares of the wireless carrier rallied more than 5% early on Monday. Like Yelp, Sprint has been a volatile stock in recent months, experiencing wild swings as investors gauge the potential for a merger with T-Mobile.
Sprint's majority owner, SoftBank, has been said to be seeking financing to acquire T-Mobile. Combined, the two companies could be a force in the wireless industry, but it's unknown if U.S. regulators would allow the merger to go through, particularly given T-Mobile's recent, rapid growth. But T-Mobile CEO John Legere talked up the merger to Bloomberg, saying that the two companies could work together to challenge the current dominant duopoly held by Verizon and AT&T.