Why Disney's Holding Back the Dow

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

The stock market remained in its recent holding pattern today, with the S&P 500 (SNPINDEX: ^GSPC  ) rising to a new record while the Dow Jones Industrials (DJINDICES: ^DJI  ) was up just a single point shortly after 10:45 a.m. EDT. Ever since May began, many analysts have looked for a pullback in light of the big runs higher that the Dow and S&P 500 have made recently, yet even the smallest declines seem inevitably answered with more buying interest. Today's excuse for keeping markets high came from China, where favorable trade numbers in April reversed a rare trade deficit from the previous month. Certainly, a lack of bad news on the global front has helped make U.S. investors more confident about future prospects.

But holding back the Dow was Disney (NYSE: DIS  ) , which fell almost 2% after releasing earnings last night. It's hard to understand the decline in light of the company's results, which featured a 32% jump in net income and better-than-expected earnings per share that came from a 10% jump in revenue. With the company's theme park, movie studio, and TV networks businesses all providing solid growth, Disney appears to be firing on all cylinders. Yet with the stock having set new all-time highs throughout the past several months, short-term moves often reflect traders' positions rather than long-term fundamentals.

In addition, unexpected surprises caused some big moves. Fusion-io (UNKNOWN: FIO.DL  ) lost a quarter of its value after co-founders Rick White and CEO David Flynn left the company to start another venture. In a strong stock market, there's always a threat that top talent will get lured elsewhere, and although Fusion-io quickly named a new CEO, the question remains whether the enterprise data-storage company can continue moving forward with the same enthusiasm under new leadership.

Finally, Whole Foods Market (NASDAQ: WFM  ) posted a better than 10% gain after beating expectations in its quarterly report. The grocer saw its net income jump 20% as Whole Foods managed to keep its profit margins high even in the face of a tough competitive environment. Investors also responded favorably to the company's decision to split its stock two-for-one, which is a typical reaction to splits even though they have no fundamental impact on share value.

It's hard to believe that a grocery store could book investors more than 30 times their initial investment, but that's just what Whole Foods has done for those who saw the organic trend coming some 20 years ago. However, it may not be too late to participate in the long-term growth of this organic foods powerhouse. In this premium report on the company, we walk through the key must-know items for every Whole Foods investor, including the main opportunities and threats facing the company. So make sure to claim your copy today by clicking here.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2417334, ~/Articles/ArticleHandler.aspx, 9/29/2016 4:40:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:20 PM
^DJI $18143.45 Down -195.79 -1.07%
^GSPC $2151.13 Down -20.24 -0.93%
S&P 500 INDEX CAPS Rating: No stars
DIS $91.80 Down -0.40 -0.43%
Walt Disney CAPS Rating: *****
FIO.DL $0.00 Down +0.00 +0.00%
Fusion-io CAPS Rating: ***
WFM $28.01 Down -0.28 -0.97%
Whole Foods Market CAPS Rating: ****