McDonald’s Corporation (MCD), The Procter & Gamble Company (PG), Alcoa Inc (AA): Strong Jobs Report Stirs Mixed Feelings for Investors

This morning the Department of Labor released June’s jobs report, which indicated that 195,000 new jobs had been created in the month. Further, the readings for April and May were revised higher by a total of 70,000 jobs. Analysts had been forecasting 155,000 new jobs for June, so this was a big surprise. The news has helped the markets rally today, and as of 12:55 p.m. EDT the Dow Jones Industrial Average (Dow Jones Indices:.DJI) is higher by 89 points, or 0.59%, while the S&P 500 is up 0.61% and the Nasdaq has risen 0.62%. But while the 89-point increase in the Dow Jones Industrial Average (Dow Jones Indices:.DJI) seems like a big win, this morning the blue-chip index made even bigger gains that were eaten away before it could recover to its current level.

McDonald's Corporation (MCD)

Due to the jobs report and the fear that the Federal Reserve will soon allow interest rates to begin to rise, Treasury bonds have been off to the races today. The five-year T-Bond began the day at a 1.41% yield and is now at 1.58%. The 10-year has risen from 2.5% to 2.7%, and 30-year has climbed from 3.5% to 3.66%. The rising Treasury yields will make it more expensive for home buyers and businesses to borrow money — which could slow the current pace of economic growth we have been experiencing.

The other problem with high Treasury yields is that the safe return on investment of Treasury bonds lures investors away from quality dividend-paying stocks like McDonald’s Corporation (NYSE:MCD) and The Procter & Gamble Company (NYSE:PG). Both companies currently have a dividend yield of 3.1% and are members of the elite dividend aristocrats — companies that have increased their dividend payments for each of the past 25 years. When bond yields fall, investor move into these safe stocks, but as bond yields increase and investors can receive similar rates of return in a safer form, they turn back to bonds, which is what’s happening today. McDonald’s Corporation (NYSE:MCD) has lost 0.5%, while The Procter & Gamble Company (NYSE:PG) is down 0.3%.

Shares of Alcoa Inc (NYSE:AA) are also missing out on the Dow party, sitting near breakeven so far today. The aluminum giant is set to announce second-quarter earnings on July 8, officially kicking off earnings season. Alcoa Inc (NYSE:AA) has had a rough time in 2013: The stock has lost 11.18% year to date, making it the worst-performing Dow Jones Industrial Average (Dow Jones Indices:.DJI) component. The metals markets are covered in red today, which could be contributing to Alcoa Inc (NYSE:AA)’s lackluster performance this afternoon. An oversupply of aluminum has plagued the company for the past few years, causing the price of aluminum to continuously decline, resulting in lower revenue and slim profit margins for Alcoa Inc (NYSE:AA).

The article Strong Jobs Report Stirs Mixed Feelings for Investors originally appeared on Fool.com and is written by Matt Thalman.

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 McDonald’s and Procter & Gamble. The Motley Fool owns shares of McDonald’s.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!