Morning Dow Report: J&J Jumps as Consumer Stocks, Telecoms Drag the Dow Down

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.

Optimistic news on the employment front has gotten a lot of attention from investors this week, and today brought some more favorable data, with initial unemployment claims falling more than expected. Yet even as signs point to a strong overall jump in nonfarm payroll gains in tomorrow's Labor Department report, the Dow Jones Industrials gave up early gains and traded down 60 points as of 11 a.m. EST. Only a third of the Dow 30 stocks posted gains, with Johnson & Johnson among them. Meanwhile, Disney and other consumer stocks were under pressure, along with telecom giants AT&T and Verizon .

Johnson & Johnson wasn't the Dow's biggest gainer, with a rise of just 0.12%. But the health care giant got a double-boost from an analyst upgrade and from its announcement that it would appeal an adverse decision affecting its OneTouch diabetes monitoring system. A Chinese agency had revoked J&J's trademark for the product, costing it exclusive rights to the device in a market that could be worth billions to the company in the long run. Whether the appeal will be successful remains to be seen, but as more companies assert their intellectual property rights in China, the stakes will rise for the emerging-market nation to recognize them more completely.

Disney fell 0.84%t. Bloomberg reported earlier today that the company could learn by Friday whether the U.S. Supreme Court will hear a case disputing the rights of start-up Aereo to retransmit broadcast signals from Disney's ABC and other major networks. Disney and its peers collect billions of dollars in fees from cable and satellite providers for the rights to retransmit their broadcast television programs. If Aereo avoids having to pay such fees, it could lead to more customers choosing its $8 monthly service over cable providers, hurting Disney's revenue.

Meanwhile, AT&T is down about 1.3% and Verizon dropped 1.6%. Both companies are having to deal with intense competition from T-Mobile, which has offered to pay termination and switching fees to lure customers from competitors' mobile networks. Already, T-Mobile's efforts have led AT&T to cut prices on its shared service plans, and further competitive pressures could be in the offing that could hurt the leading wireless network providers' profits to an even greater extent. For consumers, the news is good, but telecom stocks could suffer for the foreseeable future while the industry shakes itself out.

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Fool contributor Dan Caplinger owns shares of Walt Disney. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Johnson & Johnson and Walt Disney. The Motley Fool owns shares of Johnson & Johnson and Walt Disney. 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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