Falling Finance Stocks Drag the Dow to a Negative Finish for the Week

Credit the Dow Jones Industrial Average for beating back its earlier lows at the end of a lackluster week. The blue-chip index fell as far as 150 points earlier in today's session, but as of 2:15 p.m. EDT the Dow's crawled all the way back to a loss of about 50 points. Financial stocks are leading the index downward, and the Dow's few risers are having a hard time making much headway. Let's dig into the stories and movers you need to know about.

No help for American Express
Wall Street picked up some good news early, but it has had little impact on the markets today. The University of Michigan/Thomson Reuters index of American consumer confidence ticked up to a reading of 85.1 in July, beating average analyst predictions and increasing a full point over June's mark. Decreasing unemployment and increasing home prices helped fuel the gain as average Americans feel better about their finances.

That hasn't helped one of the Dow's biggest consumer-oriented members today, however. Shares of American Express have fallen 1% despite the encouraging report. The credit card company has had a good run recently, capped off by a strong earnings report that showed American Express gaining 3.5% in revenue and 4.9% in net earnings for the second quarter on the back of increased consumer spending.


However, a European Commission proposal to restrict transaction fees has unnerved investors in recent weeks about the company's business across the Atlantic. But so long as American consumer spending and confidence continue to pick up, American Express won't be in danger.

JPMorgan's having an even worse day, down 1.2%. Like American Express, JPMorgan delivered a beat in its most recent quarterly earnings report. However, the company's net interest income fell 4% for the quarter, and U.S. interest rates aren't likely to rise significantly anytime soon -- even as the Federal Reserve contemplates tapering back stimulus bond-buying by the end of the year. That area of JPMorgan's business could continue to slump in the future, even while the big bank performs well overall.

Intel is among the Dow's handful of gainers, but the chip maker's stock has only picked up 0.4% so far. Intel has done a great job pivoting away from the PC sector's decline recently, turning instead to delivering semiconductors to support the server market. The company's looking at the microserver market now with its new Atom C2000 chip that's built to deliver on efficiency, according to tech site ZDNet.

Intel's new push into mobile may be the company's most fascinating -- and promising -- advance if the firm can pull it off. The chip maker's rivals have beaten it to dominance in tech's most visible market, but Intel's not giving up. Intel already provides chips for phones from ZTE and Lenovo, among others, and the company has pushed into tablets with its deal with Samsung to provide chips for the Galaxy Tab 3 line. Intel may not be as strong as its mobile competitors yet, but the company's first steps into the field look promising.

Intel is late to the smartphone party, but late is better than never. Want to get in on the smartphone phenomenon? One company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either -- in fact, you've probably never even heard of it! But it stands to reap massive profits no matter who ultimately wins the smartphone war. To find out what it is, click here to access the "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

The article Falling Finance Stocks Drag the Dow to a Negative Finish for the Week originally appeared on Fool.com.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends American Express and Intel. The Motley Fool owns shares of Intel and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum