Midday Checkup: What's Pushing the Dow Lower

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The past few days have rattled the Dow Jones Industrial Average's (INDEX: ^DJI) otherwise intrepid climb for the year. While still up 5.7% year to date, the Dow has fallen further below 13,000 and given up some of the year's gains. The Volatility Index has correspondingly swung wildly, sometimes up as much as 15%, or down 10%. Today it's 10.1% higher in early afternoon trading. Here is a look at how the three major indexes are faring right now.

Index

Gain / Loss

Gain / Loss %

Ending Value

Dow Jones Industrial Average(74.1)(0.6%)12,913
Nasdaq(35.7)(1.2%)3,019
S&P 500(11.2)(0.8%)1,376

What's what
Here is a look at the big news pushing shares lower today:

  • The markets seem to still be digesting continued eurozone debt issues. Spain's borrowing costs recently spiked, indicating the region still has serious issues to work out. Italy remains on the radar as its bond yields have crept higher today as well. The yield on Italian 10-year bonds is just shy of 5.5%, while Spain's is closer to 6%.
  • News that China's growth engine may be losing steam continues to rattle investors. China's National Bureau of Statistics indicated the mainland only grew 8.1% from last year. To me the really amazing part here isn't that China's growth is slowing, but that 8.1% growth is the slowest pace it has seen in 11 quarters.
  • The news on China also pushed crude oil futures down as people worry that China's demand for oil may not be as robust as previously modeled.
  • Data were also released by the University of Michigan that indicate U.S. consumer sentiment declined in April. I found this particularly interesting since we just saw huge retail and auto sales figures in March. The reality is that much of this performance is being attributed to the unseasonably warm winter. I expected consumer sentiment to be a bit rosier and to offset the disappointing unemployment numbers we saw last week, but alas, the specter of job growth casts a darker shadow than most else.

Today's leaders and laggards
With that in mind, let's check in on some of today's biggest newsmakers.

  • Dow financial heavies JPMorgan (NYS: JPM) and Wells Fargo (NYS: WFC) both reported today. Though Wells Fargo reported a 13% gain in profit, shares are still down 2% the news. The company had a big jump in new mortgages, though a large percentage of these are likely refinances. Like Wells Fargo, JPMorgan also beat on estimates, but is still down 2.5% today. Investors seem anxious for more forward-looking news from both banks to see whether they can maintain the big runs they've had.
  • Looking off the Dow, Cheniere Energy (NYS: LNG) and Coinstar (NAS: CSTR) are some of the big winners today. Coinstar is up almost 8% while Chenier energy is pushing a 10% gain for the day. Coinstar raised its financial outlook going forward, mostly on stronger demand for its Redbox service. Given its recent tie-ups with Verizon, this could be a company that moves to the top of the streaming pack in the future. Cheniere energy seems to be surging today on news that it could be close to approval on its export plan.

How to play it
If there's one thing to be taken from today's news, it's that earnings matter. JPMorgan and Wells Fargo, despite small weightings in the Dow, are still dragging the index lower today. To get a jump on the five stocks investors need to watch this earnings season, you can click here now. Our chief investment officer and some top analysts all agree these are the ones you don't want to miss.

At the time this article was published Austin Smith owns no shares of the companies mentioned. The Motley Fool owns shares of Wells Fargo and JPMorgan Chase. The Fool owns shares of and has created a covered strangle position in Wells Fargo. Motley Fool newsletter services have recommended buying shares of Wells Fargo. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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