Why the Dow's Dropping Off This Morning

Updated

The market has the Monday blues today, as international concerns have taken precedence over domestic issues. The World Bank reduced its forecast for growth in the Chinese economy, while a member of the European Central Bank's executive board raised questions about the ECB's ability to make modifications to Greek sovereign debt, citing a prohibition over debt cancellation. By 10:45 a.m. EDT, the Dow Jones Industrials (INDEX: ^DJI) were down 22 points, and the broader market fell even more sharply on a percentage basis.

In news among Dow stocks, American Express (NYS: AXP) was up about 0.1% after announcing a deal with Wal-Mart (NYS: WMT) to offer prepaid cards with the brand name of Bluebird. The move continues a trend away from debit cards as customers tire of ever-increasing fees associated with checking accounts and other bank services. Bluebird will charge limited fees and offer protection similar to what AmEx gives its travelers' check customers, including fraud and theft protection. Wal-Mart also rose modestly on the news, but prepaid rival Green Dot (NYS: GDOT) , which gets 60% of its prepaid-card revenue from Wal-Mart sales, plunged as much as 20%.

UnitedHealth Group (NYS: UNH) rose nearly 1% as the health insurance giant announced that it would take a 90% stake in Brazil's Amil Participacoes for $4.9 billion. The transaction gives UnitedHealth majority ownership of the largest health insurance company and hospital operator in Brazil and marks a continuation of UnitedHealth's push toward international expansion.


Finally, Disney (NYS: DIS) fell more than 1%. Analysts at Caris downgraded the stock, but their biggest concern was valuation. With the stock having steadily risen more than 60% over the past year in the aftermath of blockbuster Avengers and other successes, it's not unreasonable for short-term traders to take money off the table, even if long-term investors still see plenty of potential going forward.

A small drop on a Monday morning isn't anything to worry about in the long run. To stay focused on what's important, be sure to read The Motley Fool's popular special report on the Dow, where you'll discover three promising Dow stocks with great prospects for the future. The report is absolutely free, so get your copy today.

The article Why the Dow's Dropping Off This Morning originally appeared on Fool.com.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned in this article. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Disney. Motley Fool newsletter services have recommended buying shares of UnitedHealth Group and Disney, as well as writing a covered strangle on American Express and creating a diagonal call position in UnitedHealth Group. 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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