The streak of never-ending losses seems to have paused thanks to decent, but still not great, jobs numbers. European turmoil still hovers like the Sword of Damocles over stocks, but the Greeks appear closer to forming a coalition government. One bright spot is an increase in OPEC supply pushing down oil prices, as high gas prices are a huge drag on economic recovery.
With that in mind, let's take a closer look at how the major indexes are faring and drill down on a few stocks making headlines.
Gain / Loss
Gain / Loss %
Dow Jones Industrial Average (INDEX: ^DJI)
Source: Yahoo! Finance.
The Dow broke its streak of six straight declines after clinging onto positive territory as markets softened toward the end of the trading session. Even if PPI data comes in better than expected tomorrow, the Dow will have its work cut out tomorrow, thanks to a special JPMorgan Chase (NYS: JPM) conference call after the markets closed.
The Wall Street bank disclosed a surprise $2 billion derivative trading loss and shares have been punished 5.5% after hours. Even worse there could be another $1 billion "market volatility" blamed loss showing up in Q2. Although the derivative trading should be an isolated issue, competitor Bank of America is also down 2.7% after hours. It looks like the Dow will have to overcome the previous evening's events two days in a row.
Yesterday evening, Cisco reported and spooked investors with poor guidance and barely topping expectations. After a full day of trading, the tech titan ended down a whopping 10.5%, a sight generally unseen among large-cap Dow components. Management doesn't like the macro trends for IT spending, where customers are exercising caution, and guided Cisco's fiscal fourth-quarter sales growth to roughly half of what analysts wanted. Shares are still sitting at only the midpoint over their 52-week spread, so if the slowdown in spending is true, investors may be well served waiting for a better price.
Finally, in some good news on the Nasdaq, another obesity drug, Arena Pharmaceuticals' (NAS: ARNA) lorcaserin got an overwhelming 18-4 vote of confidence from an FDA advisory committee. Shares are a near instant double, soaring 91% after hours. Arena's closest competitor is VIVUS (NAS: VVUS) ; its drug Qnexa received a 20-2 thumbs-up, but the FDA delayed a final decision on Qnexa by 3 months. If approved, both drugs will be on the market at roughly the same time, and it will be interesting to see whether Qnexa's limited indication but better efficacy outsells lorcaserin and its cardiovascular risk. Of course there are enough obese people that even late-to-the-party Orexigen (NAS: OREX) , which has also popped 15%, has a chance to make good money.
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 it won't be forever, so check it out today.
At the time thisarticle was published David Williamsonholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Cisco Systems. 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.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.