Why the Dow Jones Industrial Average (.DJI) Is Tumbling Today

Page 1 of 2

What started out as a ho-hum day is turning into a rout. With roughly an hour left in the trading session, the Dow Jones Industrial Average (INDEXDJX:.DJI) is off by 95 points, or 0.62%.

Tracing the impetus for any day’s rise or fall is an inexact science at best. That being said, the one piece of news that could be weighing on equities this afternoon concerned a report that the trade gap expanded by 8.5% last month. According to the Commerce Department, the difference between imports and exports shot up to $40.3 billion in April from $37.1 billion the preceding month.

Dow Jones Industrial Average 2 Minute (INDEXDJX:^DJI)

Offsetting this, however, was yet another report that home prices are on the mend. CoreLogic, a California-based analysis firm, noted this morning that home prices grew by 3.2% in April and by 12.1% on a year-over-year basis. This adds to a growing bevy of evidence about home prices and sales that points to a recovering, though still ailing, housing market.

An article published on the blog DealBook provided some insight into the forces behind this move. “Large investment firms have spent billions of dollars over the last year buying homes in some of the nation’s most depressed markets,” the author notes. “The influx has been so great, and the resulting price gains so big, that ordinary buyers are feeling squeezed out.” Reading between the lines, the fear is that the recent ascent in prices is only sustainable so long as these investors remain active.

But housing prices and trade data aside, there was little else to explain the sudden downturn in the market this afternoon. Most financial news sites are attributing it to concern that the Federal Reserve will soon begin reducing its support for the economy. “We definitely think that equities are going to be more volatile with all the talk of Fed tapering,” a Boston-based investment strategist noted to Bloomberg News. “You can see that volatility in the market jitteriness in the past days. Add to that, that in this slow growth environment, you tend to have more hiccups that you would otherwise have if you were in strong growth phase.”

Whether or not this is the case, the reality is that daily movements like today’s — along with speculation about what the Fed will do at its next meeting — should be largely ignored unless you’re a trader on Wall Street. To make decisions based purely on speculation, rather than fundamentals, is to venture into a financial minefield.

In terms of individual stocks, Intel Corporation (NASDAQ:INTC) is continuing its upward climb today. Shares of the chip maker gained on Friday amid rumors that Samsung had chosen Intel Corporation (NASDAQ:INTC) chips for its latest flagship tablet. The early reports were confirmed by Samsung yesterday, sending shares yet higher. And today, it seems Intel has the wind at its back. At the time of writing, its stock is up by 1%.

Page 1 of 2

Dividend Stock Alert - Billionaire Robbins' Top Dividend Idea With 70% Upside Potential

Get Paid 3.5% Per Year While Waiting For The Stock Appreciate 70%

Larry Robbins' Glenview Capital Opportunity Fund returned 101.7% in 2013 and Robbins personally made $750 million. The same fund returned 25.3% in 2014. In this FREE REPORT we will share Robbins' top dividend idea that yields 3.5% and has been increasing its dividends for 39 consecutive years. Robbins thinks the stock has the potential to appreciate 70%.

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!