Home Depot Stock Paces Dow’s 133-Point Stumble

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.

After displaying a defiant confidence via its four-day bull run, Wall Street wasn't able to justify any further gains on Tuesday, as a budget and debt ceiling deal wasn't reached by day's end. With rumors in the air that ratings agencies could downgrade U.S. debt as early as this evening, Fitch put America's AAA rating on "rating watch negative," just after the market closed. Home-improvement retailer Home Depot (NYSE: HD  ) ended as the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) largest decliner, as the index shed 133 points, or 0.9%, to end at 15,168. 

Home Depot had some credit rating news of its own on Tuesday, as its corporate credit was upgraded by S&P, which added that the outlook is now stable on the company's ratings. You wouldn't think that investors would still sell off a stock after good news like this, but it was an uphill battle for equities today, with seven out of every 10 stocks declining. After shedding 1.5%, Home Depot ended as the worst performer in the Dow, despite the company's envious positioning as a beneficiary of a continued real estate recovery. 

Elsewhere in the services sector, Expedia (NASDAQ: EXPE  ) lost 1.3%, as shares extended yesterday's precipitous fall. The 6.2% slide on Monday was spurred by a downgrade from an analyst who questioned the new management at the Expedia-owned Hotels.com. The competition has also been heating up in the online travel and lodging services arena, and frankly, investors should be wary of any investment in businesses like these, as barriers to entry are relatively low. 

Lastly, Rite Aid (NYSE: RAD  ) was one stock in the service sector that didn't find itself in the red Tuesday, adding 0.8%. That's nothing new for longer-term shareholders, who have seen the stock soar, gaining more than 540% in the past five years. The company's outperformance is a bit counterintuitive, since Rite Aid has hovered around $26 billion in annual sales for its past five fiscal years. At the same time, however, Rite Aid's been able to reduce costs, boost margins, and swing to a profit -- three things investors love to see.

What investors need to know about the national debt
The U.S. government has piled on more than $10 trillion of new debt since 2000. Annual deficits topped $1 trillion after the financial crisis. Millions of Americans have asked: What the heck is going on? The Motley Fool's new free report, "Everything You Need to Know About the National Debt," walks you through with step-by-step explanations about how the government spends your money, where it gets tax revenue from, the future of spending, and what a $16 trillion debt means for our future. Click here to read the full report!


Read/Post Comments (0) | Recommend This Article (2)

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: 2683602, ~/Articles/ArticleHandler.aspx, 12/22/2014 4:19:15 AM

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...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement