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.
A day after sliding 133 points as Washington failed to reach a deal to resolve the debt ceiling crisis and reopen the government, the Dow Jones Industrial Average's (DJINDICES: ^DJI ) rebounded with a vengeance. Wednesday's 205-point, or 1.4%, rally sent the index to 15,373, and came as the Senate announced it had reached a deal on both the budget and the debt ceiling. Speaker of the House John Boehner said the House would vote for and approve the compromise this evening. I guess miracles really do happen.
All 10 market sectors were in the black on Wednesday, with the consumer-services sector posting gains of 1.2%. Pandora stock (NYSE: P ) posted five times those returns, jumping 6%. Despite concerns over a swath of competitors from Apple's new music discovery service to Spotify's popular platform to iHeartRadio and others, Pandora's stock sits near 52-week highs. I see Pandora as a fairly speculative growth play right now, and investors should be hoping for growth -- the company hasn't yet turned a profit.
In the Dow, more traditional consumer service companies such as retail giant Wal-Mart (NYSE: WMT ) were making moves of their own. Wal-Mart added 1.7% today as shareholders breathed a sigh of relief over the tentative agreement on Capitol Hill. One major concern in the retail business over the government shutdown has been reduced spending over the holiday season, which is far and away the industry's most profitable time of year.
Another retailer outperforming today was Staples (NASDAQ: SPLS ) , which tacked on 3.5% Wednesday. Staples is implementing an extremely bold strategic promotion for the holiday season, vowing to match Amazon.com's prices. You might be surprised to learn that Staples is already the No. 2 e-commerce retailer next to Amazon, but as you might expect, Staples is a distant second. Its price-matching promotion will almost certainly put pressure on the company's margins in the short-term, but it may prove smart in the longer term as traditional retailers start to fight back against newer e-commerce powerhouses.
3 retailers to consider before the holiday season
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only the most forward-looking and capable companies will survive, and they'll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.