Morning Dow Report: Factory Data, Telecom Price Wars Spell Trouble Despite Pfizer Success

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

After a terrible January, investors had hoped to put a bad month behind them and start carving out new gains. But with the latest economic data showing a slowdown in U.S. manufacturing activity, the Dow Jones Industrials didn't cooperate with that plan, starting out February with a 150-point drop as of 11 a.m. EST. Telecom stocks AT&T and Verizon led the way down in a broad decline among most Dow components, and Pfizer was the sole blue-chip component to post anything more than a minimal gain.

AT&T and Verizon both lost about 3% as AT&T offered new lower rates for high-data cell phone rate plans. Specifically, the new pricing applies to AT&T's shared 10-gigabyte monthly plans, and the company estimates savings at $40 to $100 monthly for family or small-business plans that cover four smartphones. The move could encourage some customers to upgrade, paying less than they would for four-gigabyte or six-gigabyte plans. But it also represents a departure for the wireless industry, which has historically relied on its highest-use customers to provide high-margin revenue. Investors are anxiously waiting to see whether Verizon will respond in kind, which seems likely given the direct assault that AT&T makes on Verizon's pricing scheme in its press release.


Pfizer bucked the downtrend, soaring 3.7% after announcing strong results in its PALOMA-1 study of breast-cancer drug palbociclib. The company said the drug met its primary endpoint of improving progression-free survival in advanced breast cancer among post-menopausal women. Even though the study is just a phase 2 trial, palbociclib received breakthrough-therapy status, giving it the potential for an accelerated approval process. Pfizer is starting to enroll patients for a phase 3 trial of the drug.

Given that many investors make monthly contributions toward their investment accounts, the first day of the month is often seen as having a positive bias. If the Dow doesn't recover today, it could be another warning sign that short-term traders in particular will pay attention to in charting their trading course for February.

Get your portfolio growing
Produce big growth stocks in any market? Most experts said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

The article Morning Dow Report: Factory Data, Telecom Price Wars Spell Trouble Despite Pfizer Success originally appeared on Fool.com.

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. 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 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investing in Emerging Markets

Learn to invest in a globalized world.

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum