Economy Strengthens, Dow Shrugs
America may not be back yet, but we've seen further signs this morning that the recovery is well under way. We heard good news regarding jobless claims, which reclaimed a four-year low of 351,000, and the Producer Price Index was essentially in line with expectations (though after stripping out food and energy, the increase declined sequentially from 0.4% to 0.2%).
Despite that, the market has essentially yawned, shrugging off the positive news for the mild gains seen below.
Index | Gain / Loss | Gain / Loss % | Ending Value |
|---|---|---|---|
Dow Jones Industrial Average (INDEX: ^DJI) | 9.14 | 0.05% | 13,200.57 |
Nasdaq (INDEX: ^IXIC) | 9.66 | 0.32% | 3,040.39 |
S&P 500 (INDEX: ^GSPC) | 3.22 | 0.23% | 1,397.50 |
Source: Yahoo! Finance.
All three major indexes are up slightly, but the gains are better than they appear, considering the markets opened in negative territory. With more than a third of its components in negative territory, the Dow is currently showing a meager 0.1% increase, while the Nasdaq is edging out the S&P 500 in performance, up roughly 0.3%.
One of the Dow's notable sliders is Cisco (NAS: CSCO) , with shares down 1.8% after it announced a $5 billion acquisition of British video software company NDS Group. This purchase beefs up its video infrastructure and should bolster the company's Videoscape platform. Cisco highlighted China and India as reasons for the deal, and NDS currently counts China Central television as a customer. The best part about the deal for shareholders: Since NDS is a foreign company, Cisco can put to use cash trapped overseas while avoiding the taxes associated with repatriating the money.
At the front of everyone's mind is Apple (NAS: AAPL) , which opened the day at $600 per share -- a new all-time high -- but has since erased those gains. With the new iPad making its debut tomorrow, demand is hitting a fever pitch, and even analysts have been caught up in the excitement. Morgan Stanley put a base case price target of $720 per share on the stock with a bull case approaching $1,000! With the way Apple is going and a redesigned iPhone coming soon, Morgan's bull case may not be far-fetched.
A better approach
Watching the broad market each day can be exciting, gut-wrenching, and stressful. If you're in the mood to pick up a great company to buy for the long term, though, The Motley Fool has created a brand-new free report: "The Motley Fool's Top Stock for 2012." It features a company hand-selected by the Fool's chief investment officer that has a strong future ahead of it. I invite you to take a copy, free for a limited time. Get access to the report and find out the name of this legendary company. The report is free, but won't be forever, so check it out today.
At the time thisarticle was published David Williamsonholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Apple and Cisco Systems.Motley Fool newsletter serviceshave recommended buying shares of Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
