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.

Alcoa Inc (AA), SolarCity Corp (SCTY): Why Is The Dow (.DJI) Nervous?

Despite the recent run of record highs for the stock market, investors remain nervous that at some point, the Federal Reserve and other central banks will take away the punch bowl. After reports that the Fed has started to plot out how it will eventually withdraw from its program of quantitative easing, bond markets around the world fell dramatically — even though the Fed has given few indications that it plans to start such a withdrawal anytime soon. So far, that nervousness hasn’t produced all that much of a reaction, as the Dow Jones Industrials fell just 27 points as of 10:45 a.m. EDT, while broader markets are more narrowly mixed. But if bond worries persist, they could eventually spread into the stock market more dramatically.

Alcoa Inc (NYSE:AA)Within the Dow, weakness in materials was most prominent, with Alcoa Inc (NYSE:AA) falling about 1%. Rising bond rates make it more costly for investors and businesses to hold inventories of aluminum and other commodities, further dampening demand in an already struggling industry. With the company the most shorted stock in the Dow, investors don’t seem to have much confidence in Alcoa Inc (NYSE:AA)’s ability to rebound anytime soon even if the global economy stabilizes.

Elsewhere, though, solar stocks continued their impressive advance from last week, with SolarCity Corp (NASDAQ:SCTY) rising 9% and SunPower Corporation (NASDAQ:SPWR) climbing 6%. SolarCity Corp (NASDAQ:SCTY) announces earnings after the bell today, and the residential installer of solar systems has found strong growth from its business model of providing long-term financing to help homeowners install solar panels. Meanwhile, with SunPower Corporation (NASDAQ:SPWR) making a presentation to analysts later this week, investors are hoping to see whether the company can outpace rival First Solar, Inc. (NASDAQ:FSLR), which has fully rebounded from brief losses after its earnings report last week was slightly less positive than it had led investors to believe. Solar energy has strong potential, and if a much-needed shakeout among Chinese competitors occurs, then these companies could see the benefits.

The article 1 More Reason the Dow’s Nervous This Morning originally appeared on

Motley Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.