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.
It's turning out to be a banner week for investors, as the markets are on a roll today, yet again. The Dow Jones Industrial Average (INDEX: ^DJI) has followed a higher track all day, and as of 2:15 p.m. EDT, it's gained more than 100 points. Most of the index's blue chip stocks are in the green today, and IBM (NYSE: IBM) has surged to the front of the pack with a strong day of gains. Let's catch up on the stock action you need to know.
IBM shakes it up
IBM's shares have gained more than 2% so far today in a rare jump for investors. The stock's been the third worst-performing Dow stock in 2013, as shares have lost around 1.2% year to date, making IBM the index's worst tech stock, as well. It hasn't helped the stock that IBM's revenue has fallen off by more than 4% year over year in the first six months of the year.
However, the company's making waves in investor circles today by selling off its customer care business to Synnex (NYSE: SNX) in a reported $505 million sale. For the latter, the acquisition will add a big punch to the company's bottom line: Synnex said that the purchase will boost its earnings per share by $0.55 over the course of the 12 months after the acquisition's close.
For IBM, however, the sale's a chance to refocus on the company's most profitable segments. While the company's customer-care business reported more than $1 billion in revenue last year, the company's been divesting businesses recently as it looks to hone in on cloud services and software. The latter posted a gross margin of 88% over the year's first six months, and showed 3% revenue growth in that time, making it the company's fastest-growing unit.
If IBM can spread the wealth to its other segments, investors won't miss that customer-care business for long.
Disney's (NYSE: DIS) also having a strong day, as shares are up 1.6% so far, to rank the stock among the Dow's top leaders. The company pleased investors today after it announced that it will hold back its next installment of the Pirates of the Caribbean film franchise until 2016. While the series has been a big moneymaker for Disney in the past, delaying it will allow more time to refine the film -- and more importantly, it'll give investors more time to forget the flop of fellow Johnny Depp-starring Disney film, The Lone Ranger.
Disney will take a hefty hit from The Lone Ranger's box office failure, with some expecting the company's loss on the film to reach up to $190 million. Investors shouldn't fret too much, despite that blow: Pirates has made more than $3.7 billion across the worldwide box office so far, and Disney also has the next installment of the Star Wars saga lined up for release in 2015. Therefore, 2015 and 2016 will make back-to-back years of big blockbuster pushes for two of the film's top franchises -- and if both hit the mark, investors will be seeing green.
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