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.
Gain / Loss
Gain / Loss %
|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.
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