The Dow Jones Industrial Average gave up some small gains earlier in the day to finish Monday roughly flat, adding about 16 points on the day. There was little today that could sway investor sentiment firmly one way or the other.
Chinese stocks had a nice day after the Chinese government continued to ease its regulatory stance toward tech stocks and reopen cities that have been locked down due to the resurgence of COVID-19 cases in the country.
There wasn’t much economic data for investors to analyze today, although the latest data for the Consumer Price Index (CPI), which tracks prices across a variety of daily goods and services, is set to come out Friday and will detail how much prices rose on a year-over-year basis for May. The CPI is one metric investors use to gauge inflation, which is top of mind right now.
The yield on the 10-year Treasury Bill rose slightly and hovered at about 3.04%. The price of oil topped $120 per barrel today before falling back down to around $118, as of this writing. Here are the best- and worst-performing stocks in the Dow today.
Travelers wins the day
Travelers Companies (TRV 0.25%) rose roughly 1.6% and was the biggest winner in the Dow for no obvious reason today. The outperformance comes a few days after Goldman Sachs analyst Alex Scott downgraded the insurance giant from a “neutral” rating to a “sell” rating, while lowering his price target from $190 to $170. Travelers finished the day, trading around $177 per share. Scott attributed the downgrade to the fact that the company could see margins shrink because of trends in the property and damage space.
Despite the downgrade, insurers in general could fare well in a rising-rate environment. Travelers will be able to reinvest cash in bonds that will now yield. Plus, the company has a good reputation for conservative underwriting, so I don’t think this is a bad pick in the high inflation, rising interest rate environment.
The pharmaceutical company Amgen (AMGN 1.83%) was the Dow’s biggest loser today, with its stock sinking about 1.2% for no clear reason.
In fact, as far as I can tell, the company saw some slightly good news today. The U.S. Food and Drug Administration expanded the use of one of Amgen’s drugs for certain adults that have rheumatoid arthritis that is either moderate or severe.
Amgen is also a stock that looks to be a good pick during the current volatility that has plagued markets all year long. The drug maker has a nice 3% dividend yield and also a strong balance sheet. The company has more than $6.5 billion of cash and liquid investments. In the first quarter of the year, Amgen generated $2 billion of free cash flow and a profit of nearly $1.5 billion. The company is up more than 8% this year, widely outperforming broader markets, and is the type of stock you want to have in times of uncertainty.