Why the Dow's Nervous This Morning

The stock market has been on a roll lately, but there's one thing that could put a stop to its bull run: inflation. With the Consumer Price Index rising due to higher gasoline prices, Pimco bond expert Bill Gross says that inflation is coming and that it could hurt economic growth. Consumer sentiment also fell somewhat in February. But overall, the market didn't react strongly, with the Dow Jones Industrials (INDEX: ^DJI) rising just nine points to 13,262 at around 10:50 a.m. EDT. The S&P 500 rose two points to 1,404.

Among Dow stocks, Johnson & Johnson (NYS: JNJ) was fractionally lower after its Incivo hepatitis C drug got a favorable draft recommendation from U.K. health-care pricing regulators. With huge interest in hepatitis C treatments in recent months, it's important to remember that companies not only have to produce effective treatments, but they also have to demonstrate that they're cost-effective for national health programs.

Intel (NAS: INTC) rose 0.4% after it reportedly bought a stake in Sweden's Tobii Technologies for $20.8 million. Tobii makes technology that allows PCs to track eye movements, letting you control your computer simply by looking at different parts of the screen. If the technology could be adapted for mobile devices, it could represent a big competitive move for Intel.

Finally, Merck (NYS: MRK) was up 0.5%. An FDA staff report about its ridaforolimus drug for sarcoma, which it developed with Ariad Pharmaceuticals (NAS: ARIA) , raised concerns that the drug didn't extend patients' survival or halt the progression of the disease. But the drug will go before an FDA advisory panel next week, which is typically the last step before the agency makes a final decision on approval. Ariad dropped almost 3% on the news.

Keep your perspective
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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 Intel and Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Intel and Johnson & Johnson, as well as creating a diagonal call position in Johnson & Johnson. 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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