Rumors, Retail Sales Figures, and Chinese Production Data Move Markets Today
As rumors spread that the Federal Reserve is planning to slow is quantitative easing program, investors are becoming more fearful that the days of free money will soon come to an end, and the markets are mixed. As of 12:55 p.m. EDT, the Dow Jones Industrial Average is lower by 30 points, or 0.2%, while the S&P 500 is slightly higher, up just 0.04%. The NASDAQ has also just recently turned positive and is now up 0.25%.
Let's briefly take a look at a few of the stocks causing the Dow to move lower today.
Shares of both Alcoa and Caterpillar , two companies that heavily rely on the Chinese economy are trading lower due to lower-than-expected industrial production growth from the country reported today. While economists were estimating growth of 9.5%, production growth for April came in at 9.3%. While this was an increase from the 8.9% growth in March, it still disappointed investors. Additionally, the report highlighted the fact that China's economy is more volatile than it has been in the past, and the go-go days of double-digit growth are likely over for the second largest economy in the world. Alcoa's stock has taken the news harder than Caterpillar, as shares of the aluminum producer have fallen 1.44%, while Caterpillar is down 0.55%.
Shares of Intel are also moving lower today because of outside forces. The stock is off by 1.31% after a research report by released by Bernstein Research stressed a number of negative issues that Intel will be facing in the coming years. The authors mainly believe that while Intel facing lower PC chip sales and attempts to move into the mobile chip market, the company will face pressure on cash flows and earnings. Additionally, the massive capital investment required to compete in the mobile chip market will likely add to the financial stress the company will experience.
Despite a rise in retail sales data this morning, shares of Wal-Mart are trading lower by 0.71% today. After sales figures fell 0.5% in March, the Commerce Department announced this morning that sales figures rose 0.3% in April. But, a 1% increase in automobile sales, and strong home and garden supplies sales pulled the reading into positive territory, while electronics, clothing, food and beverage stores all fell. Additionally, the report indicated that general merchandise stores saw sales fall from March to April after an increase from February to March.
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Fool contributor Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513. 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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