Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Sprint Nextel Corporation (S), JPMorgan Chase & Co. (JPM): Dow Shows Life After Last Week’s Decline

After declining 208 points last Friday to end last week lower by 1.22%, Dow Jones Industrial Average as up 63 points, or 0.41%, as of 12:50 p.m. EDT today. The other two major indexes are not faring so well: The S&P 500 is currently down 0.11%, while the Nasdaq has lost 0.68% of its value.

One reason the broader indexes are declining is the weak manufacturing report that was released this morning. The Institute for Supply Management reading fell 1.7% during the month of May to 49%, marking the first time the report indicated a contraction since November 2012 and just the second time since July 2009. The report was surely not a good sign for the economy.

Sprint Nextel Corporation (NYSE:S)

A few Dow losers
Sprint Nextel Corporation (NYSE:S) shareholders are being urged by the Institution Shareholder Service to take SoftBank’s $20 billion buyout big. An ISS report points to the fact that Sprint Nextel Corporation (NYSE:S) would have the financial backing it would require to gain more spectrum, which the company needs to do if it truly wants to compete with Verizon Communications Inc.(NYSE:VZ) and AT&T Inc. (NYSE:T). The two top players in the wireless-service industry are having a rough day, likely because of this report. The stronger Sprint becomes, the more pressure Verizon and AT&T will feel to change their strategies, take care of their customers, and be competitive with the other carries on price — steps that would likely hurt the companies’ bottom lines. Shares of both Verizon and AT&T are down about 0.3%.

Along with the Dow’s wireless companies, both of the index’s banking stocks are dropping today. Shares of JPMorgan Chase & Co. (NYSE:JPM) are down 1.7%, while Bank of America Corp (NYSE:BAC) has lost 2.4, making it the worst-performing Dow stock this afternoon. Today’s banking decline is being blamed on rising interest rates. Goldman Sachs analysts recently commented that rising interest rates will affect several sectors, including financial stocks. However, while increased interest rates will put pressure on banks in the short term, they will likely help banks in the long run. When the zero-risk interest rate is low, the banks can’t lend money at extremely high rates. But when the zero-risk (or Treasury bond) interest rate rises, the banks can charge more for money, increasing their interest rate spreads and therefore their profitability. But in the short term, the banks may get caught lending money with a low spread as Treasuries move higher.

The article Dow Shows Life After Last Week’s Decline originally appeared on

Fool contributor Matt Thalman owns shares of Bank of America and JPMorgan Chase & Co (NYSE:JPM).. The Motley Fool owns shares of Bank of America and JPMorgan Chase. 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.

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

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!