Lack of Confidence Depressing the Dow
Europe continues to weigh heavily on the Dow Jones Industrial Average (INDEX: ^DJI) as it moves lower today after losing over 100 basis points in yesterday's session. Moody's downgraded 28 Spanish banks based on worries that the government will not have the capital to support them if property losses keep handcuffing the economy. With more credit downgrades and yields increasing on Spanish sovereign debt, the fleeing of capital is putting Spain on life support, with the only cure being capital injection from the already distraught eurozone.
As the global financial web gets ever more tangled, U.S. investors are feeling the pinch, as today's Consumer Confidence Report shows that Americans are less confident in the labor market and incomes. However, not all the news is negative: The S&P/Case-Shiller report showed that housing prices fell at a slower rate than estimated, showing slight improvements in the dire housing market.
|Dow Jones Industrial Average||(34)||(0.27%)|
|WTI Oil Futures||(0.09)||(0.11%)|
Source: Yahoo! Finance.
JPMorgan Chase (NYS: JPM) is at the top of the Dow class today, up 1% midday thanks to the boost of confidence given by Goldman Sachs. Goldman upgraded JPM, calling the recent 15% drop drastic, and citing its low valuations and its dividend -- the highest in the sector -- as reasons to purchase the bank.
On the other end of the spectrum, Hewlett-Packard (HYSE: HPQ) is getting thumped today, down 1.3%, as its global downsizing initiative is now under way with plans of cutting 9,000 U.S. jobs. This move is just the beginning; the company plans on laying off a total of 27,000 employees.
Coca-Cola (NYS: KO) is down 0.3% today after the company released plans to expand into India. The soda maker is planning on spending $5 billion by 2020 as it looks to increase its operations in one of the fastest-growing markets in the world.
Outside of the Dow, Facebook (NAS: FB) continues its push higher, up 1.9%, trying to make it back to its IPO price. The day of reckoning comes tomorrow, when a large number of analysts who helped in the IPO underwriting process will be free to discuss their feelings about Facebook after the 40-day quiet periods ends.
Take a long-term view
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The article Lack of Confidence Depressing the Dow originally appeared on Fool.com.Joel South owns shares of no company listed above. The Motley Fool owns shares of Facebook, JPMorgan Chase, and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Coca-Cola, Moody's, andGoldman Sachs. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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