Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
The Dow Jones Industrial Average (DJINDICES: ^DJI ) is poised for a slightly lower start today. Stock futures as of 7 a.m. EDT pointed to a 14-point dip at the opening bell, after the blue chip index logged its first gain in seven sessions yesterday. Markets in Europe and Asia were mixed, as Japan's Nikkei rose 2.2% and European stocks were little changed. Through all of the trading volatility of the past week, manufacturing data from China, Europe, and the U.S. continue to point to a slow but steady global recovery.
The economic calendar is light today, with just a report on home sales due out at 10 a.m EDT. The pace of new home purchases is expected to fall to a rate of 485,000 for July, a tad lower than the 497,000 reported in June. Keep in mind that this report is subject to huge revisions thanks to its tiny sample size, so any one monthly number won't tell us much. Still, readings on inventory levels and median sales prices will be released as well, giving an early check of the strength of the housing market amid rising mortgage rates.
On the earnings front, Gap (NYSE: GPS ) shareholders can breathe a sigh of relief. The company navigated the tough economic environment this past quarter better than most retailers. Gap earned $0.64 a share, a 31% boost from the year-ago quarter. Gap and Old Navy brands helped power the company to an overall comparable sales gain of 5%. Gap also boosted its dividend and raised its profit outlook for the full year to between $2.57 and $2.65. Shares are up 2% in premarket trading.
Pandora (NYSE: P ) investors didn't get off so easy. The Internet radio company announced earnings yesterday that just met Wall Street's expectations. Revenue surged by 55% as the active listener base grew by 30% to 71.2 million. But Wall Street apparently didn't like Pandora's outlook, which guided to revenue of about $175 million and lower earnings as the company continues to spend aggressively on expanding its business.
Worries about the competitive environment are also weighing on Pandora. Apple (NASDAQ: AAPL ) is prepping its iTunes radio service for release in the fall. And it's not just Apple's deep pockets that should spook smaller competitors in the space. It's also possible that the tech giant could use its clout to negotiate a lower cost structure for radio content, making it particularly dangerous as a rich rival with a built-in cost advantage. Pandora shares are down 8% in premarket trading.
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