These Dow Downers Spoiled Yesterday's Rally

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.

Investors hoping for the stock markets to follow through on their gains from yesterday were disappointed with today's market moves as two key stock benchmarks were unable to put together further advances after setting new all-time record highs on Wednesday. Between the inevitable revisiting of the monetary-policy question and other potential roadblocks such as the federal budget, it wasn't surprising to see a pullback. All in all, though, the declines were modest, with the Dow Jones Industrials (DJINDICES: ^DJI  ) falling 40 points and the S&P 500 down just 0.2%.

Among the stocks pulling the Dow down was UnitedHealth (NYSE: UNH  ) , which dropped 3%. The reason for today's drop wasn't immediately obvious, although the company's approach to the coming implementation of Obamacare has some investors nervous. Uncertainty often causes short-term traders to push stocks downward, and with private employers starting to move their employee plans to private health exchanges, it's clear that the entire framework of how Americans obtain health insurance will be in flux for the foreseeable future.

Hewlett-Packard (NYSE: HPQ  ) dropped 2.2% on its penultimate day as a Dow stock. Analysts were quick to point to weak guidance from rival Oracle (NYSE: ORCL  ) as a cause for concern among HP shareholders, as Oracle gave weaker earnings guidance than investors had hoped to see. Some argued that Oracle's weakness would translate to poor results throughout the industry, but it's telling that Oracle shares managed to gain on the day despite HP's drop. The implication is that HP will suffer even more from the competitive pressures Oracle cited than Oracle itself will.

Finally, Disney (NYSE: DIS  ) fell 2%. The company's movie division yet again decided to push back future film releases, this time affecting Pixar offerings. Coming on the heels of a delay for its next long-anticipated Pirates of the Caribbean installment, Disney needs to give investors more confidence that it can handle all the potential blockbusters it has in its rich stable of media-powerhouse brands like Marvel, Lucasfilm, and Pixar.

Can Disney hold off its rivals?
One thing Disney's long-term success has proven is that the world can't get enough of superheroes. Super-powered movies have been some of the highest-grossing films of all time, and as these franchises continue to grow, the numbers are only going to get more impressive. The Motley Fool's new free report "Your Ticket to Cash In on the Superhero Battle of the Century" details what you need to know to profit from your favorite superheroes and whether Disney is the best stock to pick for your portfolio. Click here to read the full report!


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.

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: 2646184, ~/Articles/ArticleHandler.aspx, 9/21/2014 10:22:31 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...


Advertisement