These Falling Stocks Can't Stop the Soaring Dow
In a pattern we've seen a lot lately, the Dow Jones Industrials has rebounded from early-session losses to head toward new record highs. Hearing relatively benign comments from St. Louis Federal Reserve President James Bullard on the need to continue the current round of quantitative easing, investors felt more comfortable getting back into stocks, and by 12:50 p.m. EDT the Dow was up by 46 points, or 0.3%, while the S&P 500 was up 0.18%.
But a few Dow stocks didn't join in the bullish party. Travelers has posted the largest decline, falling more than 2%. In the wake of the tornado that devastated an Oklahoma City suburb yesterday, Travelers and other property and casualty insurance companies will be tallying the financial damage. With past events elsewhere causing substantial losses to property, the Oklahoma tornado will likely spell the end of a nice respite from major catastrophic claims that Travelers has enjoyed over the past several months.
Verizon has posted a drop of more than 1% after comments from Verizon Wireless joint-venture partner Vodafone made it seem less likely that a deal to change their current partnership arrangement would get done. Verizon would benefit from having full control of Verizon Wireless, but with Vodafone's stake valued at $100 billion or more, it would take some complex strategies to pull off a transaction. Meanwhile, Vodafone investors would likely prefer a full-blown buyout of the entire company versus a piecemeal sell-off of the Verizon Wireless stake, further adding to the price tag. Verizon should be able to continue with the partnership as currently structured, but it's unlikely that doing a deal will get any easier in the future.
Finally, outside the Dow, the iShares Silver Trust has fallen more than 2.6% on a poor day for precious metals in general. After yesterday's bounce in metals prices, gold and silver investors had hoped that the big plunge since April had run its course. Yet with the Fed continuing to be an unpredictable variable, investors need to plan for continuing uncertainty that could lead to further bumpiness for precious-metals ETFs in the weeks and months to come.
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The article These Falling Stocks Can't Stop the Soaring Dow originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Vodafone. 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.
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