Why the Dow Still Won't Budge
The Dow Jones Industrial Average continued its ambivalence streak today, finishing up three points, or 0.02%, though shares were down by as much as 1% earlier in the day. This morning, investors shrugged off a report that showed consumer sentiment reaching a six-year high as the University of Michigan survey hit 85.1, topping estimates at 84.1, and improving from 83.9 a month ago. Since consumer spending is a major component of the American economy, the continuing increase bodes well for stocks and the economy overall. There was no direct reason for this morning's drop, though investors may be taking profits headed into a potentially volatile week with the Federal Open Market Committee report expected, as well as GDP and jobs data. The Dow has been nearly perfectly flat this week as investors digest a mixed bag of earnings reports; they seem to have finally forgotten about the Fed noise that stirred so much volatility earlier.
Turning to individual stocks, Boeing was the blue chips' biggest loser, falling 1% as yet another problem was found on one of its 787 planes. This time, Qatar Airways said it had taken one of its 787s out of service due to a "minor" technical issue. According to unofficial reports, there was smoke emitting from near an electrical compartment while the plane was grounded. There were also several other minor 787 issues reported today, including an overheated oven on an Air India flight, and wiring issues on United and Japan Airlines planes. Also today, Boeing replaced the chief engineer on the 787, moving former head Mike Sinnett to VP of product development. It's unclear when the 787 drama will come to an end, but the concerns continue to be a stain on a manufacturer that's otherwise operating at full throttle.
The Dow's biggest gainer today, meanwhile, was Travelers , popping 0.9%, as fellow insurance companies, including Everest, Cincinatti Financial, and Montpelier reported strong quarters. Still, their impact on Travelers should be limited, as that company already reported earnings, falling 3.4% earlier this week, when it said it would cut jobs and lower auto-insurance prices.
Financials also finished lower, as JPMorgan Chase and Bank of America were down 0.8% and 0.7%, respectively. JPMorgan announced that it would exit physical commodity trading as regulatory scrutiny continues to mount against banks having potentially conflicting interests. The Wall Street titan said it planned a sale, spin-off, or strategic partnership for its commodity-related assets.
With the American markets reaching new highs, investors and pundits alike are skeptical about future growth. They shouldn't be. Many global regions are still stuck in neutral, and their resurgence could result in windfall profits for select companies. A recent Motley Fool report, "3 Strong Buys for a Global Economic Recovery," outlines three companies that could take off when the global economy gains steam. Click here to read the full report!
The article Why the Dow Still Won't Budge originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of JPMorgan Chase & Co. 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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