Markets Fight to Regain Some of Yesterday's Losses


After the Dow Jones Industrial Average lost 139 points yesterday, investors were starving for some good news today, and they got it in the S&P Case-Shiller index of home prices. The index showed that housing prices rose by 2.5% in April, bringing the year-over-year increase to 12%. Only one of the 20 cities the index follows moved lower (Detroit), while some areas saw increases of more than 20%.

And with that positive news, the Dow is up 109 points, or 0.75%, as of 12:45 p.m. EDT. Meanwhile, the S&P 500 is up 0.92%, and the Nasdaq is higher by 0.72%. With the housing market recovering, consumers should feel increasingly confident in the economy and their own financial security, which in turn should lead them to spend more and thus drive the economy forward.

Only two Dow components are in the red today, including UnitedHealth , whose shares have fallen 0.6% this afternoon. Last week it was announced that health insurers would pay a total of $500 million in premium rebates under the Obamacare laws. This sent most insurers lower, but yesterday UnitedHealth managed to close higher while the markets tanked. Today, the tables have turned. Health care investors just can't seem to make up their minds on whether they should be buying or selling insurance providers as the full implementation of the Affordable Health Care Act approaches. Unless you're a current owner, the average investor would probably do best to sit this one out until we truly learn how the new laws will affect the industry.

Outside the Dow, Netflix is taking it on the chin from an analyst at Bernstein. Carlos Kirjner believes the stock is "way too overvalued" based on its future prospects. Kirjner does believe the company's subscriber base and profit margins will grow in the coming years, but not to the level that the market currently has built into the price of the stock. Bernstein lowered its rating on the stock from "market perform" to "underperform," with a price target of $180. Netflix shares are currently down 2.6% to $210.04.

CONSOL Energy and most other major coal stocks are dropping again today as investors wait to hear President Obama's plans for combating climate change, which he is expected to discuss today. After falling 4.9% yesterday, shares of CONSOL are down another 2.5% today. Many believe the President will focus on ways to move the country toward clean-energy solutions and have the EPA place tighter regulations on coal-fired power plants. Tougher regulation on the use of coal will likely cause more coal-fired power plants to either close down or convert to natural-gas-fired plants. This won't help CONSOL, but it shouldn't kill the company, which has been diversifying its operations and becoming a player in the natural-gas industry.

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Fool contributor Matt Thalman has no position in any stocks mentioned. 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. The Motley Fool recommends Netflix and UnitedHealth Group. The Motley Fool owns shares of Netflix. 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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Originally published