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 stock market often moves in ways that investors wouldn't expect. In the run-up to Oct. 1, markets performed badly as investors apparently feared the prospect of a government shutdown and its potential impact on economic growth and the long bull market in stocks. Yet once that shutdown became a reality, investors suddenly didn't seem to mind, remaining convinced that a resolution would come in short order. In response, the Dow Jones Industrials (DJINDICES: ^DJI ) posted a 62-point gain today. Broader markets managed even larger percentage gains, with the S&P 500 rising 0.8% and the Nasdaq climbing more than 1%.
However, looking at the Dow's 30 component stocks, several didn't participate in the overall average's gains. Cisco Systems (NASDAQ: CSCO ) posted the sharpest decline of any Dow stock, falling 0.8%. Most of the headlines today centered on CEO John Chambers' compensation, which amounted to $21.2 million including salary, bonus, and restricted stock. That marked an 80% jump from last year, and although the stock is up 20% so far in 2013, some shareholders will inevitably wonder whether Chambers earned his pay.
Tech peer Intel (NASDAQ: INTC ) also fell, with a decline of 0.4%. The company said yesterday that it would buy software company Sensory Networks, giving Intel broader capacity for applications like firewalls and email content filtering. At just $20 million, the deal isn't all that big, but it does involve Intel casting its lot with Sensory Networks and wrapping up other similar partnerships with rivals. Such moves might seem too small to move the needle, but taken as part of a broader strategy, they might be enough to make Intel more relevant as the semiconductor industry evolves.
Finally, Wal-Mart (NYSE: WMT ) fell half a percent as it looks poised to fight another big battle with online retailer Amazon.com (NASDAQ: AMZN ) over this year's holiday season. Amazon said it expected to have 70,000 full-time seasonal jobs in order to fulfill online orders at its centers nationwide. Meanwhile, Wal-Mart is going to open two new fulfillment centers of its own in Pennsylvania and Texas to handle online purchases. The Texas center has already begun shipping online orders, and although the Pennsylvania facility likely won't open until next year, it nevertheless shows the seriousness of Wal-Mart's efforts to defend its retail dominance.
Can Wal-Mart recover?
Amazon isn't the only retailer that's making big moves to capture business from Wal-Mart. Learn more about them in The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how Amazon and another innovative company are consistently outperforming their peers and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.