Why the Dow's Still Stuck This Morning

Updated

Often, news-making events surprise investors and move markets wildly. But when those major events are scheduled, the market often takes a wait-and-see approach. With the Group of 20 finance ministers meeting in Moscow, that seems to be how investors are handling the situation, as the meeting addresses issues like competitive currency-devaluation and global economic trends. Closer to home, U.S. consumer sentiment rose more than expected, and the New York Fed's measure of manufacturing activity moved to a positive figure, but industrial production fell slightly. The net sum of all this conflicting data was an 11-point gain for the Dow Jones Industrials as of 10:50 a.m. EST, with broader benchmarks also narrowly higher.

But the big mover in the Dow is tugging the index in the other direction: Wal-Mart is down 2%. The retail giant is slated to report earnings next week, and while analysts expect about 9% growth in earnings per share for the company's holiday quarter, Wal-Mart hasn't had the consistent growth that longtime investors were accustomed to seeing in years past. A rebounding economy may actually lead customers away from Wal-Mart toward higher-end retailers, and a potential minimum-wage hike threatening to raise labor costs, investors seem wary in advance of next week's report.

Elsewhere, SunPower is down 1.3% after yesterday's huge 22% jump. The entire solar industry has gotten good news lately, as efforts to help finance solar upgrades for residential customers promise a new source of much-needed demand for panels. With SunPower being the efficiency leader, it has seen an even larger boost than many of its peers, and as Fool solar expert Travis Hoium points out, having the efficiency edge gives it better future prospects than rival First Solar and other players in the space.


Finally, Ultra Petroleum has dropped more than 7% to hit a new multiyear low after announcing earnings. The company met earnings expectations but posted a much bigger drop in revenue than expected: Sales fell 20% from the year-ago quarter. But what likely spooked investors was that Ultra slashed its capital investment in half and sees pressure to its production. As a low-cost leader in the industry, Ultra is best poised to survive low gas prices, but even Ultra has its limits.

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The article Why the Dow's Still Stuck This Morning originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Ultra Petroleum. The Motley Fool owns shares of and has options positions on Ultra Petroleum. 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 Motley Fool has a disclosure policy.

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