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.
As politicians in Washington continue to bicker over a compromise to end the government shutdown and avoid hitting the debt ceiling, the markets are now heading south after four winning sessions. As of 12:45 p.m. EDT the Dow Jones Industrial Average (DJINDICES: ^DJI ) is down 44 points, or 0.29%, while the S&P 500 is off by 0.17% and the NASDAQ is lower by 0.16%. But not all is lost within the Dow.
Both Coca-Cola (NYSE: KO ) and Johnson & Johnson (NYSE: JNJ ) are slightly higher today after the companies reported earnings this morning. Neither company has shown massive growth in recent years, but today they once again lived up to their reputations as safe and reliable growers. Coke reported $2.45 billion in profit, or $0.54 per share, versus profit of $2.31 billion, or $0.50 per share, it reported last year during the same quarter. Revenue fell 3% to $12.03 billion, for which the company partly blamed currency exchange throughout the world. Coke experienced flat soda volume growth in North America but a nice 8% jump in China and a 22% climb in India.
Johnson & Johnson reported that revenue rose 3% to $17.58 billion, while analysts were looking for $17.43 billion. Earnings hit $1.36 per share, $0.04 better than what the Street was expecting. Furthermore, for the second quarter in a row, the company raised its full-year guidance. The previous earnings range prediction of $5.40 to $5.47 per share has now been raised to $5.44 to $5.49.
The slow but steady growth from both J&J and Coke, quarter after quarter and year after year, is why they have been great companies to buy and hold forever. Both companies pay a reliable dividend that yields 3%, can be counted on like clockwork, and can hugely accelerate your portfolio's performance if reinvested in more shares.
Meanwhile, shares of Apple (NASDAQ: AAPL ) are up 1% today after it was announced that the company will hire Burberry CEO Angela Ahrendts. The move is seen as a way for Apple to improve its products' luxury brand image. While many would agree that Apple is already seen as a luxury brand, it never hurts for a company to attempt to improve that image, which is where Ahrendts will come into play. This is just another sign that Apple never stops trying to improve its product line and customer experience, which is why Apple will continue to innovate and grow its product offerings long into the future. As for an investing angle, I wouldn't put too much weight in this announcement, but I do like what it says about the company's culture in general.
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