What Kept the Dow Down Today?
U.S. stock markets ended the trading day with mixed but relatively flat results. Driven by some lackluster economic data, the rally in U.S. stocks that has seen the Dow Jones Industrial Average (INDEX: ^DJI) rise nearly 8% since the beginning of the year largely stalled for the second straight day today, with the index falling 0.4%. A decline in sales of existing U.S. homes drove stocks down at the onset of trading this morning. As a result of the slowing, the inventory of pre-owned homes rose slightly to 2.43 million units, or a supply large enough to satisfy current levels of purchasing for 6.4 months at current rates. However, home-sale listings also tend to increase heading into the spring, giving the figure a potential alibi.
The rest of the market
The individual Dow stocks remained tame today as well. PC heavyweight Hewlett-Packard (NYS: HPQ) decreased the most of any component, dropping 2.2% on the day. Yesterday, CEO Meg Whitman announced plans to combine the company's PC and printer division. The move is intended to eliminate overhead costs and improve margins. While this certainly should help the company improve performance in the short term, HP still lacks a credible road map for how the business plans to break into a world increasingly shifting toward mobile devices.
Outside the Dow, K-Cup manufacturer Green Mountain Coffee Roasters (NAS: GMCR) rose more than 10% on the day, as the company announced that its new line of products will include Starbucks (NAS: SBUX) -branded products. The lift reflected the fear the market had that Green Mountain would end its relationship with the coffee powerhouse. So far in 2012, Green Mountain has handily outpaced the overall market, rising 24% versus 11.6% for the S&P 500. The company, however, still faces issues regarding its lingering patent expiration surrounding its popular K-Cups, which come off patent this September.
In merger news, IPO darling Zynga (NAS: ZNGA) jumped 2.5% today, after the company announced its plans to acquire game company OMGPOP for $200 million. Zynga has made clear its intention to diversify its revenue streams away from social-media juggernaut Facebook, from which the company derived more than 90% of its revenue last year. OMGPOP developed the popular game Draw Something, which generated more than 35 million downloads over the past six weeks. The app now ranks near the top of the most popular apps on Apple's iTunes store.
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At the time this article was published Andrew Tonner held no financial position in any of the companies mentioned in this article at the time of publication. The Motley Fool owns shares of Starbucks and Apple.Motley Fool newsletter serviceshave recommended buying shares of Starbucks, Apple, and Green Mountain Coffee Roasters, writing covered calls on Starbucks, creating a bull call spread position in Apple, and creating a lurking gator position in Green Mountain Coffee Roasters. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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