Markets Bounce Back on Reassuring Economic Data


This morning investors received two important economic data points: the initial jobless claims from last week and import and export pricing data. The jobless claims were expected to come in 1,000 claims lower than the previous week's but actually fell by 12,000 claims to 334,000. That's close to the levels of claims we saw prior to the recession, which is a sign that the economy has come a long way.

The prices of imports and exports dropped unexpectedly in May as a result of a weakening global economy, which could derail our own recovery here at home. The import prices were lower by 0.6%, primarily due to lower oil prices, which accounted for half of the decline. U.S. export prices slipped 0.5%, marking the third straight monthly decline. While it's good for Americans to be able to buy imports more cheaply, it hurts us when our own exports sell for less.

Despite the somewhat mixed data, the Dow Jones Industrial Average is up by 80 points, or 0.53%, as of 12:55 p.m. EDT after it lost 127 points to close below 15,000 yesterday. The S&P 500 is up 0.67%, while the Nasdaq has gained 0.6% so far today. But as usual, we can still find a few Dow losers today.

Shares of American Express are on the loser list again: After falling 2.88% yesterday, the stock is down 0.4% this afternoon. One reason for the decline could be an unflattering report from Oppenheimer. The firm initiated coverage on American Express and gave the company a rating of "Perform." Citing headwinds down the road, the stock's forward P/E of 16, and the share price's recent 52-week high, the analyst believes AmEx's stock needs to take a little breather.

Microsoft is down 0.9% after the company announced that its new Xbox One gaming console will hit the Asian markets sometime during late 2014. That time frame is almost a year after the device will launch in the U.S. market, and with Sony's PlayStation 4 coming out prior to the Christmas holiday this year, Microsoft will likely miss out on new business, as customers in Asia will not want to wait a whole year to get a new gaming device. As a shareholder, I often find myself wondering why Microsoft makes the decisions it does, and this is certainly one of those instances. However, this isn't a big enough problem to make me want to close out my position.

Coca-Cola is down 1% after the company announced this morning that its bottling plant in Venezuela was reopening after a 24-day strike. Employees were protesting low wages, and at this time we do not know the terms of the agreement that got the plant back up and running, nor the total impact of the plant's 24-day closure. Mexico's Coca-Cola Femsa, a joint venture of Coca-Cola and Mexican company Femsa, has 34 bottling plants in Latin America, and 18% of the company's 2012 sales came from Venezuela. Just nine days into the strike, Femsa management said the plant's closure had cost the company 15% of its May sales. But with Coke being a worldwide company, even 15% in one region will not bring the empire crumbling. Long-term investors shouldn't be concerned with this isolated incident.

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Fool contributor Matt Thalman owns shares of Microsoft. The Motley Fool recommends American Express and Coca-Cola. The Motley Fool owns shares of Microsoft. Check back Monday thru 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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