Wednesday's choppy trading ended with a loss for stocks. Modest declines for the Nasdaq Composite (-0.1% at 10,417) and the S&P 500 Index (-0.3% at 3,577) had the two indexes extending their losing streaks to six days, while the Dow Jones Industrial Average shed 0.1% to 29,210.
In focus today was September's producer price index (PPI), which showed wholesale inflation rose at a faster-than-expected pace last month. Meanwhile, core PPI, which excludes volatile food and energy prices, posted its largest month-over-month increase since May.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The inflation data came ahead of this afternoon's release of the minutes from the Federal Open Market Committee's (FOMC) September meeting, when the central bank issued its third consecutive 75 basis-point rate hike (a basis point = 0.01%). The minutes showed red-hot inflation is still top of mind for the Fed, and confirmed that the central bank "needed to move to, and then maintain, a more restrictive policy stance" in order to ease price pressures.
Not All Dividend Stocks Are Created Equal
Today's PPI report makes tomorrow's release of the consumer price index (CPI) all that more critical, especially as the Federal Reserve continues to be concerned about stubbornly high inflation. "No doubt the Fed still has its work cut out for them, and if tomorrow's CPI read is hot, don’t be surprised to see some investors come to grips with how long the road to tamer inflation may be," says Mike Loewengart, head of portfolio construction at Morgan Stanley Global Investment Office.
We've talked in this space many times about how investors can protect their portfolios against potential volatility in the market, including with dividend stocks. But not all dividend payers are created equal. "Too often people are drawn to the allure of a high yield, not realizing the company doesn't have the financial strength to pay the same level of dividend into the future," says Austin Graff, co-chief investment officer and portfolio manager of the TrueShares Low Volatility Equity Income ETF (DIVZ). "Combine that with the fact that we have entered a new paradigm in the market, from extremely easy money policy to tighter monetary policy, the dividend yields of companies that rely on heavy debt loads become suspect."
As such, it's important for investors to focus on high-quality dividend stocks, which can often be found in companies consistently growing their payouts. The obvious place to start is with the Dividend Aristocrats, an elite group of S&P 500 stocks that have raised their dividends for 25 straight years. There are also the Dividend Kings – the crème de la crème of dividend growers that have hiked their payouts for at least 50 consecutive years. Check them out.
-
Investors Buy the Nasdaq's Big Dip: Stock Market TodayStocks are up and down again to end an up-and-down week ahead of big earnings announcements and the eventual return of regular economic data flow.
-
Dow Dives 797 Points as Government Opens: Stock Market TodayThe process of pricing and re-pricing realities old and new never stops, and next week promises to be at least as exciting as this week.
-
Dow Climbs 327 Points, Crosses 48,000: Stock Market TodayMarkets are pricing the end of the longest government shutdown in history – and another solid set of quarterly earnings.
-
Dow Climbs 559 Points to Hit a New High: Stock Market TodayThe rotation out of tech stocks resumed Tuesday, with buying seen in more defensive corners of the market.
-
Risk Is On Again, Dow Jumps 381 Points: Stock Market TodayThe stock market started the week strong on signs the government shutdown could soon be over.
-
Stocks Bounce But End With Big Weekly Losses: Stock Market TodayThe stock market rout continued on Friday, but a late-day burst of buying power brought the main indexes off their session lows.
-
Risk Is Off Again, Dow Falls 397 Points: Stock Market TodayMarket participants are weighing still-solid earnings against both expectations and an increasingly opaque economic picture.
-
Stocks Rally as Investors Buy the Dip: Stock Market TodayMost sectors are "go" only a day after talk of bubbles, extended valuations and narrow breadth undermined any kind of exuberance.
