Why the Dow's Taking a Breather This Morning


Investors have been joking about how morning weakness in the stock market has tended to give way to gains by the time the markets close for the day, and so it's hard to take too seriously this morning's modest losses in major market benchmarks. Most market analysts are pointing to the drop in weekly unemployment claims to their lowest levels since the beginning of 2008 as a sign of continued improvement in the labor market, but with conflicting data from some earlier economic reports, it's premature to declare an end to worries about the economy in general. Nevertheless, losses were minor, with the Dow Jones Industrials down just 12 points as of 10:45 a.m. EDT and the S&P 500 falling about a quarter-percent.

Even with the general calm, some stocks made more extensive moves. Boeing rose 1% as Japanese airline All Nippon Airways said that it would resume flights of the 787 Dreamliner on June 1. ANA operates more Dreamliners than any other airline and said it would start international routes using the aircraft beginning this summer. If things continue to go well for the aircraft, then Boeing may finally be able to get a big weight off its shoulders and start focusing on meeting its production targets to deliver on its big backlog of orders.

Beyond the Dow, earnings news made some big splashes. Green Mountain Coffee soared more than 20% after its quarterly report last night. As important as better-than-expected earnings were for investors, the key piece of news that Green Mountain gave was its decision to expand its K-Cup deal with Starbucks , with Starbucks agreeing to triple the number of products sold for the Keurig and Keurig Vue brewers over the next five years. Given that many see the Starbucks Verismo as a competitor to the Keurig, the deal comes as a somewhat unexpected bonus for Green Mountain, especially now that K-Cup patents have expired and thereby allowed third-party vendors to sell compatible versions of their own.

Finally, Groupon jumped 10% after reporting better sales last night than analysts had expected to see. The beleaguered daily-deals company managed to post 42% growth in its North American segment, although weakening revenue internationally calls into question one of Groupon's potential long-term growth strategies. With former CEO Andrew Mason having left the company, Groupon needs to move past its interim leadership structure to find a new vision for itself going forward. Today's jump in the stock might excite investors, but it won't last if Groupon can't follow through with new and interesting ideas.

Find out more about Green Mountain in our premium research report, in which you'll find great information on whether Green Mountain is a buy even at higher prices. You'll also get a year's worth of updates to keep you informed as the company announces new initiatives. Click here for instant access.

The article Why the Dow's Taking a Breather This Morning originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Green Mountain Coffee Roasters and Starbucks. The Motley Fool owns shares of Starbucks. 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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