Market Wrap-Up for July 19 (IBM, COF, QCOM, UNP, AXP, MS, more)

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The market has been doing a good job of "whistling past the graveyard" when it comes to ignoring the bad economic data out lately, including this morning (Philly Fed survey, existing home sales, jobless claims). With many eyes on company earnings, the poor economic data is being met with less reaction. However, this practice could be a mistake for investors making big bets on the markets continuing to ignore the fundamental story of the economy.

As for the big earnings movers, investors were cheering the results from V.F. Corp ( VFC ), Capital One Financial ( COF ), IBM Corp ( IBM ), Qualcomm ( QCOM ), and Union Pacific ( UNP ). On the flipside, selling was mostly the reaction to results from Johnson Controls ( JCI ), UnitedHealth Group ( UNH ), Danaher ( DHR ), Morgan Stanley ( MS ), and American Express ( AXP ).

We've got tons of earnings reports up on The Dividend Daily blog, so be sure check them out.

Missing on Revenues, Beating on Profits

The title above seems to be a central theme from the early earnings reports we've been making our way through. Corporate America is right to be cautious, as companies are not seeing the growth analysts keep saying is right around the corner. So what does corporate America do? More with less.

The mention of new job hires remains quite elusive, and despite the moves we are seeing from the Federal Reserve, at some point the economy needs to be able to stand on its own. The proverbial "elephant in the room" that no one likes to point to is the technological/web advances being made that can flip and industry on its back, i.e. companies with 20-30 employees competing quite easily with those who operate with many times that headcount.

As I keep saying, a healthy job market remains the ultimate foundation for a vibrant economy. Without it, we will see the numbers of those relying on government assistance continuing to rise. As for the investment ramifications, we are monitoring the data closely and will certainly make our recommendations with a keen eye on what is coming down the road - and not what has already happened.

Student Debt Will Bite Many of Us

New data released Tuesday by the Federal Reserve Bank of New York shows middle-aged Americans feeling the biggest negative effect of student debt obligations. The delinquency rate, or the percentage of debt on which no payment has been made for 90 days, was 11.9% for debt held by borrowers aged 40 to 49 as of March. That rate is worse than the average 8.7% rate for borrowers of all ages. Those over 40 and in debt are still paying balances from college they attended many years ago, but at the same time, their net worth has flipped upside down as home values and savings have declined sharply in recent years. The college loan effect also taps those in their 50′s and 60′s, as we hear of parents and grandparents taking on the burden of helping children and grandchildren absorb the cost of their college education.

Most older individuals going through these situations can all tell you they never planned on being on the hook for the younger generation's bills. Thus the importance of making sound investment/financial decisions at every point in our lives. That way, you'll be prepared when the unexpected happens.

25 Years of Dividend-Increasing Stocks

We recently updated our list of dividend stocks that have been paying out dividends for 25 years or more. Be sure to check out the latest list of names here .

Dividends Really Matter

Financial blog DailyReckoning.com recently took a look at the difference dividend payouts made in the overall return investors saw throughout the prior decades. Here are some of the highlights:

- The Nasdaq is down 28% since the end of 1999. Even the "blue chip" S&P 500 stocks are down 15% during that time frame…until you add back those "boring" dividends. With dividends included, the S&P 500′s 15% loss flips to a 6% gain.

- Without dividends, the S&P 500 index would have produced a loss for the 25 long years from August 1929 to August 1954. Then again, without dividends, the S&P 500 produced a 5% loss during the 13 years from September 1961 to September 1974. But with dividends included, the S&P's loss became a 46% gain.

- Over the course of the last half-century, dividends have contributed more than half of the stock market's total return - 56%, to be exact.

Of course, you can't discuss the potency of dividend investing without making mention of how awesome compound returns are. I can't stress enough the power of compound interest: you take a small amount of money and turn it into a large amount over time. Finding the right companies at the right price points which not only grow earnings, but also grow their dividend payouts as well!

New Watchlist Article Out Today

Be sure to check out our weekly Top 50 High-Yield Watchlist Names post that is out today, exclusively for Dividend.com Premium members. This list gives readers a good idea of what stocks we're watching behind the scenes here for potential upgrades.

Go Beyond This Newsletter

We know many of you enjoy reading the daily newsletter, but remember that with our Dividend.com Premium service, the newsletter is just one small component of what we offer. Here are the "Big Three" benefits of our Premium service:

- The Best Dividend Stocks List is used by tens of thousands of investors to help build their own portfolios.

- Creating your own Watchlist allows you to track the performance, news, and upcoming dividend payouts of the particular stocks you care about.

- Finally, we offer the most complete and easy-to-use dividend data on the web. Many subscribers use this data as part of a "Dividend Capture" trading strategy, but long-term investors can use it to keep track of impending payouts. Just visit our Ex-Dividend Calendar for a complete outlook on which companies will be paying out soon.

We don't ask for a credit card to use our free trial, and we don't bill you when your trial ends. No obligation whatsoever! So keep enjoying the newsletter, but please give Dividend.com Premium a shot if you haven't already subscribed!

Thanks for reading, and I'll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Stocks

Referenced Stocks: AXP , COF , DHR , IBM , JCI

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