Why The Dow's Taking a Breather Today


After seven consecutive days of gains, the Dow Jones Industrial Average is taking a breather today. With roughly an hour left in the trading session, the blue-chip index is down by 12 points, or 0.08%.

While it was a relatively quiet day on the economic front, there were nevertheless two releases that caught my colleague Dan Dzombak's eye. First, the National Federation of Independent Business updated its index of small-business optimism this morning. For the month of February, the index increased 1.9 points to 90.8. According to the press release, "While a nice improvement over the last several reports, the Index remains on par with the 2008 average and below the trough of the 1991-92 and 2001-02 recessions."

And second, the Department of Labor released its estimate of job openings for the month of January. The report showed that there were 3.7 million jobs at the end of the month, an improvement of 80,000 compared with December. As Dan noted: "The jobs market is a key factor for the U.S. economy, and it has been holding back the domestic recovery as the unemployment rate stays high. Rising job openings show a healthier economy as companies look for more employees."

In terms of individual stocks, the Dow is being weighed down by both technology companies and financials. Among others, shares of Cisco, Intel, and Microsoft are all lower in afternoon trading. The sector has struggled over the last year as political and economic uncertainty continues to take its toll on business investment.

Political infighting in 2011 over the debt ceiling caused the United States to lose its "AAA" credit rating. At the end of last year, it was the fiscal cliff, which was narrowly averted. Then the sequester was triggered at the end of February. And today, House Budget Committee Chairman Paul Ryan unveiled the Republican party's "most provocative fiscal framework in years, calling for Medicare and Medicaid overhauls and new limits on defense spending not previously endorsed by party leaders," according to The Wall Street Journal.

With respect to financial stocks, both Bank of America and JPMorgan Chase are floundering on the heels of last week's Federal Reserve-administered stress tests. While both lenders made it through the central bank's hypothetical economic gauntlet in one piece, it remains to be seen whether they'll be given the go-ahead from regulators this Thursday to increase capital distributions to shareholders.

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John Maxfield owns shares of Bank of America and Intel. The Motley Fool recommends Cisco Systems and Intel. The Motley Fool owns shares of Bank of America, Intel, JPMorgan Chase & Co., and Microsoft. 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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