Stocks sold off late on Friday, essentially wiping out all the gains seen in the post-FOMC rally. With many fiscal and monetary policy uncertainties on the horizon in the U.S., investors seem to have switched into bear mode and started to take some profits ahead of the potential headwinds. Even today’s bullish movement from Apple (AAPL) shares wasn’t able to sway investors into buy mode, and the major indices continued to retreat into negative territory.An Apple a Day …
Apple shares closed higher in today’s trading after the company announced that it sold 9 million iPhones this weekend, the first weekend of sales for the new iPhone 5s and iPhone 5c models. Due to these record breaking sales, Apple also raised its revenue guidance, which also added to investors’ bullishness today.
Aside from Apple, shares of IBM Corp. (IBM) also edged into positive territory, after the company announced that it is investing $17 million in a new data center facility in Bogota, Colombia.
Furthermore, due to Wall Street analysts’ upgrades, shares of American Electric Power Co. (AEP), Maxim Integrated Products (MXIM), Sherwin-Williams Company (SHW), and Avago Technologies (AVGO) rallied today.Stocks on the Decline
Heading into negative territory today were shares of Agrium (AGU), even though the company announced a 50% dividend increase. This is because the company simultaneously issued a weak third quarter outlook due to poor sales volume and soft prices. These contrasting announcements show some of the peculiarities of commodity-based companies, as they are trying to offset some bearish news with some bullish news. While Agrium might be paying out a higher dividend in the short-term, in might not be sustainable for too long if its outlook is already negative. As such, dividend investors should be hesitant in taking a long-term position in the stock.
Be sure to check the Dividend Daily for all the latest earnings reports, analyst moves, and much more.New Additions to the Dow Today
Today, the Dow Jones Industrial Average welcomed three new members to the 30 stock index. Goldman Sachs (GS), Visa (V), and Nike (NKE) are now components of this widely covered, and highly scrutinized, index. When it was announced two weeks ago that GS, V, and NKE would be replacing Hewlett-Packard (HPQ), Alcoa (AA), and Bank of America (BAC) on the index, analysts and professional investors essentially rolled their eyes at the move. These insiders noted how irrelevant the index has become on Wall Street, partially due to its flawed, price-weighted average. Also, the Dow’s name has become misleading, as there are few industrial stocks actually on the index. To most Wall Streeters, the S&P 500 is the mainstream index to follow, while the Dow has become antiquated and an irrelevant index.
Nonetheless, even if there are flaws in the way the index is calculated and what stocks are included in the index, it is still the most analyzed index by the mainstream media and many retail investors. It is by no means irrelevant, and we shouldn’t write-off the index so easily. When most people hear, “the Dow rose 100 points today,” their ears perk up and they hope that their 401(k), IRA, or whatever investment portfolio they have saw some gains as well. Because the overall population has been conditioned to equate the performance of the Dow to the overall stock market, it adds a bit of influence in the confidence of consumers all across the country, which can spur a bit of demand in other investments that help boost the economy. So, even if there are flaws in the Dow’s measurements, it still holds weight in the minds of many individuals in the United States, and even abroad. Right or wrong in their opinions on the Dow Jones Industrial Average, Wall Street insiders shouldn’t be so quick to discredit the index all together. For more, don’t forget to check out our Dow 30 Dividend Stock List.
Thanks for reading! Be sure to check us out on Twitter @dividenddotcom. We will see you tomorrow.
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