Why the Dow Bounced a Bit This Morning
After yesterday's market plunge, investors wondered if a long-awaited correction was in the works. At least for now, though, stocks are regaining a little bit of lost ground. Employment numbers released this morning showed a better-than-expected jump in private-sector job creation, and if government data on Friday confirms that showing, it could go a long way toward bolstering confidence in the economy. At about 10:45 a.m. EST, the Dow Jones Industrials (INDEX: ^DJI) were up 17 points to 12,776, while the S&P 500 (INDEX: ^GSPC) rose 3 points to 1,346.
But not every stock was able to rebound. Kraft Foods (NYS: KFT) fell about 1.8% in early trading, as the stock earned a downgrade from Jefferies. The analyst firm pointed to higher pension costs, spinoff-related expenses, and a general slowdown in volume throughout the food industry as factors holding the stock back. Longer-term, though, the company appears poised to benefit from the short-term pain.
Merck (NYS: MRK) also dropped, losing 1.3%. Largely lost in the noise from yesterday's broad-based plunge was news from the pharmaceutical company that it would miss analyst estimates on earnings for the first quarter. Yet by holding its full-year profit forecast steady, Merck may simply think that temporary factors like currency exchange rates, which are hurting results, won't last for long.
Finally, AT&T (NYS: T) was almost unchanged as the mobile provider awaits an expected announcement later today from Apple about the release of the iPad 3. Some believe that the new iPad may offer 4G capability, which could spur a shift of customers away from the WiFi version toward the more expensive 4G-capable iPads.
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At the time this article 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 Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position on Apple. 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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