Market Wrap-Up for July 6 (CAT, CMI, POT, STX, more)

This morning’s monthly jobs report number came in much worse-than-expected, prompting a wide sell-off in the U.S. markets. The markets staged a bit of a late comeback, however, finishing well off the session lows.

The Labor Department said that 80,000 jobs were added in June, while the unemployment rate stayed at 8.2%. We’ve long said here at that any economic recovery ultimately boils down to job creation — quality job creation — and we haven’t seen much optimistic data recently on that front.

Many market watchers are hoping for some new quantitative easing (QE3) from the Federal Reserve following a string of disappointing economic data. Only time will tell whether Ben Bernanke is willing to crank up his printing press one more time in an attempt to spur growth. With the recent capitulation among European regulators, it wouldn’t be a surprise (not that we’d necessarily welcome such a move).

Major industrial were hit hard today, with stocks like Caterpillar (CAT) falling 2.5% on an analyst downgrade, and diesel engines maker Cummins Inc. (CMI) closing down 3%. Elsewhere, fertilizer play Potash (POT) shares fell following an analyst downgrade, but recovered a good amount of their losses. Hard drive maker Seagate (STX) saw its shares plunge more than 5% in early trading down, but the stock regained nearly all of those losses after cutting its earnings guidance.

Finally, oil prices continue to be extremely volatile. After a huge bear market in oil from beginning in early May, the price of “black gold” has see-sawed in big moves seemingly every day over the past two weeks. Oil fell over 3% today as energy traders once again attempt to price in the effects of a potential economic slowdown.

You Can’t Rush a Good Thing CEO Jeff Bezos has routinely come under scrutiny from analysts whenever his company misfires on a particular quarter. The stock certainly pulls back when the company misses their estimates, but more often than not, his focus is not on the short term (quarter-to-quarter), but rather on how well the company can compete over the long term.

It took his company years before they hit profitability, but since then, the ride has been much better. That said, the company is still looking to do things most other retailers can not. Similarly, when we were building, it felt like an eternity before our site went live. We were trying to get all the pieces in place so that when we launched, most of the technical glitches would already be worked out. And most importantly, we needed to know that our DARS Rating System was as good as it could possibly be, and that the information we provided was up-to-date and accurate.

Could we have pushed harder and launched our service sooner? Definitely, but anyone who has ever worked on any major business initiative will tell you, there are only so many quality hours in a day to do magnificent work. When you push too hard, you end up rushing in areas that you will regret later on. Pacing yourself and focusing on building something that will last is the smartest course of action, and is the ONLY thing you should be concerned with. If what you build is truly beneficial to others, then and only then will you begin to reap the financial rewards that come along with that sort of effort.

Dividend investing itself embraces this same long-term-focused mantra. I truly believe that this course is best for the vast majority of all investors out there. If you take your time, do your research, and stay disciplined, the odds are you’ll achieve great results.

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A Look to Next Week and a Weekend Preview

Looking ahead to next week, third quarter earnings will begin marching in, as we are expecting results from Alcoa (AA), Yum Brands (YUM), J.P. Morgan (JPM), and Wells Fargo (WFC), just to name a few. The focus will likely be on the economic data as well as the latest Wall Street analyst calls.

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

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