Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The S&P 500 Index's (INDEX: ^GSPC) three-day decline ended Thursday, as stocks responded to signs that the Chinese economy is getting back on track. The world's second-biggest economy boosted both imports and exports, indicating that the trend of decelerating growth in the last two quarters may soon come to an end. In the U.S., trailing four-week jobless claims fell to the lowest level since 2007, providing some optimism on the domestic front, as well. The S&P 500 added six points, or 0.4%, to end at 1,697 Thursday.
CenturyLink (NYSE: CTL), a $20-billion telecom based in the U.S., stumbled 5.6% as the company lowered forecasts for the 2013 fiscal year, and projected declining sales for the 2014 fiscal year. CenturyLink's new outlook today is indicative of just how quickly things can change in telecom and in business generally; just last quarter, the company raised its sales estimates, only to lower them today.
Of the 10 sectors in the market, telecom was the only one to fall today, which should help to give some idea why Windstream (NASDAQ: WIN), another telecom company, ended as one of the S&P's worst, declining 4.2% Thursday. Simply put, Windstream struggled today because it's very difficult to post impressive results when you're losing customers. Windstream lost customers in each of the following three segments: voice lines, digital TV, and high-speed Internet. If you're a smaller player, it's tough operating in an oligopoly like the telecom sector; though Windstream tries to differentiate by focusing on rural markets, "rural growth" is a hard thing to come by.
Lastly, Computer Sciences (NYSE: CSC), an IT services company, dropped 3.8%. A few things contributed to Thursday's decline, the first of which was simple profit taking. The company reported impressive first-quarter results late Tuesday, blowing out Wall Street's earnings expectations. As a result, the stock soared 8.5% yesterday. Up more than 30% already this year, some short-term investors may be inclined to cut and run. But today brought more game-changing information for markets to process: Computer Sciences acquired Infochimps, a big data firm that should immediately help the company enhance its analytics ability, and launch it into the growing big-data field. Terms of the deal weren't released; it's clear the acquisition should add value; it's just not clear how much that added value cost.
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