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Wal-Mart Helps Pull Dow Higher as the Holiday Season Approaches

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Data delayed by the government shutdown is finally beginning to flow, and the Bureau of Labor Statistics announced on Tuesday that nonfarm payroll jobs increased by 148,000 in September -- lower than the expected 180,000. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is trading 0.57% higher at 3 p.m. EDT, as investors seem optimistic that the Federal Reserve won't begin tapering its bond-buying program this month. With that in mind, here's a look at some of the stocks on the move today.

Wal-Mart (NYSE: WMT  ) is one of the biggest Dow winners today, trading 1.5% higher. However, not all investors are convinced its retail dominance will continue. Dollar stores have challenged Wal-Mart's brick-and-mortar operations with convenient locations and cheap pricing, while the chain has struggled to compete with for online shoppers. Wal-Mart intends to address those problems with its Neighborhood Market stores and major investments in e-commerce.

As we inch closer to the holiday season investors in big retailers are worried that weak retail results could continue. A weaker holiday season would be reason for concern, given that the period represented 27% of Wal-Mart's annual sales last year, according to Forbes magazine. While Wal-Mart definitely faces headwinds, it remains a leader in food and general-merchandise retail prices and can be extremely aggressive with low prices to gain market share.

Nike (NYSE: NKE  ) is taking a breather today, trading down slightly after surging nearly 25% over the last six months. Nike plans to launch its FuelBand SE, an updated version of the original FuelBand activity tracker, just in time for the holiday season next month. Nike's new device will feature sleep-tracking and a special workout-tracking mode; it'll also run you about $149. While this move will help boost Nike's holiday sales, if executives plan to hit projected revenue growth going forward the company will need a strong holiday season from its basketball footwear and apparel segment.

Nike's recent quarterly report beat Wall Street expectations, and its pricing power bodes well for the holiday season. Strong holiday sales would go a long way toward convincing consumers Nike's brand image can pull the company through times of slower sales, unlike some competitors.

Outside the Dow, Netflix (NASDAQ: NFLX  ) has been a wild ride today, initially surging 9% in early trading before dropping more than 7% in the red. Late Monday, Netflix reported quarterly earnings of $0.52 per share, which was quadruple its EPS for the same time last year. Netflix's sales rose from $905 million to $1.1 billion, and its U.S. video-streaming subscribers improved to 31.1 million from last quarter's 29.8 million.

As my colleague Adam Levine-Weinberg noted, what was even better about the report was how Netflix beat its midpoint net-income guidance despite an accounting change that increased content expense by $27 million. Even with the solid beat, investors seem uneasy about Netflix's stock price reaching overvalued territory, as it has absolutely soared over the last year.

NFLX Chart

NFLX data by YCharts.

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updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

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Related Tickers

9/23/2016 4:55 PM
^DJI $18261.45 Down -131.01 -0.71%
NFLX $95.94 Up +0.11 +0.11%
Netflix CAPS Rating: ***
NKE $55.15 Down -0.26 -0.47%
Nike CAPS Rating: *****
WMT $72.35 Up +0.08 +0.11%
Wal-Mart Stores CAPS Rating: ***