Why the Dow's Dropping This Morning

The U.S. may be the largest economy in the world, but lately, international tension has come to the forefront. News that China cut its GDP growth target to 7.5% made many fearful of the impact that slower growth could have on the world economy, despite the longer-term benefits that a shift to a more internally focused economy would have on the emerging economic nation. Europe's potential impact on the global economy also continues to make investors wary. Just before 10:30 a.m. EST, the Dow Jones Industrials (INDEX: ^DJI) were down 82 points at 12,896, while the S&P 500 (INDEX: ^GSPC) fell 8 points to 1,361.

Bucking the downtrend was IBM (NYS: IBM) , which briefly jumped above the $200 per share mark before falling back to a more modest gain. Technology is one of the few areas in which growth hasn't been largely dependent on emerging markets like China, as innovation in mobile devices has raised awareness of the industry and made IBM's value-added services even more useful. Shares have moved sharply higher in recent months, but with the company hoping to see $20 per share in earnings within the next few years, IBM could rise much farther in the long run.

Merck (NYS: MRK) also gained close to 1% on news that it plans to submit an application for a new allergy medicine to the FDA for approval next year. The company cited substantial reductions in allergey symptoms from a Phase 3 clinical trial. That announcement apparently outweighed news that the FDA will need more data before approving a combination cholesterol drug that includes both Merck's Zetia and Pfizer's Lipitor.

Finally, Alcoa (NYS: AA) fell about 2.5%. China's growth forecast definitely cut into the stock, as its business relies on investment in heavy infrastructure -- the sort of investment it appears that China is moving away from. Yet even with a glut in aluminum, Alcoa announced that its joint venture with Saudi Maaden would expand with a new production line for automotive and construction sheet-metal. With a 100,000-ton annual capacity, Alcoa has to hope that the market for processed aluminum will pick up.

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At the time thisarticle was published Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of IBM. Motley Fool newsletter services have recommended buying shares of Pfizer. 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 Fool has a disclosure policy.

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