Jobs Report Lessens Likelihood of September Tapering
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
This morning the pivotal unemployment and jobs report from the Bureau of Labor Statistics wasn't terrible, but many believe it wasn't good enough for the Federal Reserve to begin drawing down its bond-buying program during its meeting this month. While analysts had been expecting 180,000 new jobs, the report showed that 169,000 jobs were created in August and that the unemployment rate had fallen from 7.4% to 7.3% -- mostly due to Americans dropping out of the labor force.
That news, and the belief that tapering will be held off, has the markets rebounding from a big drop this morning. Early in the trading session the Dow Jones Industrial Average had fallen more than 148 points, but as of 12:45 p.m. EDT the index is up 37, points or 0.25%. The S&P 500 and the Nasdaq followed similar paths this morning, but both are in the green now. The early-morning drop came as the result of a warning from Russian President Vladimir Putin explaining that Russia would assist Syria if the U.S. attacked.
Within the Dow, only a few losers can be found today. Although one is Verizon which is still dealing with the backlash of the announcement that it will purchase the 45% stake in joint venture Verizon Wireless that is still owned by Vodafone. Today it surfaced that a Verizon shareholder has filed suit to stop the acquisition, saying the merger is "insufficient and inadequate" to shareholders. I'm not sure about those claims, but the deal will cost Verizon a lot of money -- $130 billion -- and leave the company digging itself out of debt for years to come, which may postpone future growth. Verizon has lost 0.8% today.
Another loser today is DuPont , down 0.8%. Just yesterday DuPont competitor Monsanto received some bad news: Its suit against farmers who claim they did not knowingly use the company's patented seeds will go to the Supreme Court. The farmers are trying to prevent Monsanto from suing them if they accidentally used the company's genetically engineered seeds. If the Supreme Court decides in favor of the farmers, that would mean DuPont would also be unable to sue those who may have used its seeds without paying the manufacturer.
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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 has no position in any of the stocks mentioned. 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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