Markets Were Ready to Break Records. Maybe Not Now.


Yesterday, the Dow Jones Industrial Average closed just 128 points below its all-time high, while the S&P 500 ended the day just 35 points short of its own record. The markets have been on a tear lately, and over the past month and a half, the Dow alone has gained more than 6% while only one of its 30 components is trading below where it started at the beginning of the year.

Nearly every indicator shows the U.S. economy is stronger than it has been for the five years, but some will argue it got that way because of the Federal Reserve's intervention. And just as the Fed can give, the Fed can also take it away. The markets fell today because the January Fed minutes showed that its members don't all agree over the future of its quantitative easing programs.

There's a clear case to be made that the cheap money from the Fed has improved the economy, and many investors fear that the current program may end before the economy is strong enough to stand alone without assistance. Those fears caused the Dow to drop 108 points, or 0.77%, the S&P 500 to lose 1.24%, and the Nasdaq to close lower by 1.53%. But not every Dow component met the same fate as the major indexes.

Who was up and why?
Ever since the FAA grounded the 787 Dreamliner in January, Boeing's engineers have been working toward a solution to fix the problems caused by the plane's lithium-ion battery. Today it was announced that company officials will meet with the FAA on Friday with plans to guarantee that the battery system won't damage the plane or emit smoke in the future. While the full details of the planned fixes are unknown, people familiar with the situation said that a harder battery case and an air-circulation unit for venting fumes are two parts of the solution. Shares of Boeing ended the day up 0.17%.

Shares of Verizon Communications received a welcome boost on this down day, rising by 0.94% after news that the company had closed the sale of three different blocks of its 700 MHz spectrum to Colorado Valley Communications, Panhandle Telecommunications Systems, and Nortex Communications. The details weren't released, but these were sales that needed to happen. Verizon had struck a deal with the FCC back in August to sell parts of its 700 MHz spectrum for the commission to approval Verizon's purchase of the Advanced Wireless Services spectrum from a joint-venture company called SpectrumCo. While shareholders can only hope the company received a decent price for its assets, at least they now know the FCC will be off the company's back and Verizon can now move forward with its plans.

Finally, shares of Merck rebounded today after the company announced that it had cut a deal with Samsung Bioepis to produce biosimilars, which are essentially generic versions of biologic drugs. Merck recently blamed generic-drug manufacturers for the company's poor performance, so this move will hopefully help the company fight its competitors on their own turf. Merck's stock price rose 1.04% today, making it the best performing Dow component of the day.

This titan of the pharmaceutical industry stumbled into 2013 and continues to battle patent expirations and pipeline problems. Is Merck still a solid dividend play, or should investors be looking elsewhere? In a new premium research report on Merck, the Fool tackles all of the company's moving parts, its major market opportunities, and reasons to both buy and sell. To find out more -- and get a full year of free updates -- click here to claim your copy today.

The article Markets Were Ready to Break Records. Maybe Not Now. originally appeared on

Fool contributor Matt Thalman has no position in any stocks mentioned. Follow Matt on Twitter: @mthalman5513. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.