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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.
Despite the somewhat concerning data coming from the Thomson Reuters/University of Michigan's final reading of consumer sentiment for October, the markets held up rather well today. The Dow Jones Industrial Average's (DJINDICES: ^DJI ) ended the session up 61 points, or 0.39%, while the S&P 500 rose 0.44% and the Nasdaq increased by 0.37%. The data that investors clearly shrugged off was that consumer sentiment fell from 77.5 in September to only 73.2 in October, which also happens to be the lowest reading we have had in 2013. While the government shutdown certainly played a large role in this number being lower during October, investors should keep an eye on this to see if it rebounds nicely in November.
Yesterday's news causing moves today
Shares of Home Depot (NYSE: HD ) closed down 0.69% today. The move comes after the stock performed quite well yesterday, when it gained 2.3%, which my colleague John Divine noted may have been caused by investors believing interest rates will remain low for some time and thus the housing market will continue chugging along. While this all may be true, there are a large number of investors now shorting the stock. From September 13 to October 15, the days to cover increased by 56% while the number of shares sold short jumped 25%. This is an indication that the home-improvement store is losing the faith of a number of investors and may continue to see a fair share of negative days in the future. But average investors not looking to make a quick buck shouldn't be too concerned with these numbers, and the upside is that if there is a short squeeze, the stock could really take off.
Ford (NYSE: F ) was another stock that fell today after performing well yesterday. The stock lost 0.9% this afternoon after gaining 1.3% on Thursday. The move earlier in the week came after the automobile company reported earnings $0.05 higher than last year's and $0.08 higher than what Wall Street expected. Total revenue rose 12% and Ford shocked analysts and investors by reporting a much better quarter than expected in Europe, where it had lost more than $500 million during the third quarter last year but now only lost $228 million.
While that news helped push the stock higher yesterday, today's decline was likely just investors cashing in on the great year the stock has had -- up 57% and while shares are near a 14-year high. So, again, long-term investors should sit tight and wait for more strong results next quarter.
Lastly, shares of 3M (NYSE: MMM ) rose 0.75% today after the company reported earnings yesterday after the closing bell. Earnings per share of $1.78, higher than last year's $1.65-per-share earnings and analysts' $1.75 estimate. Revenue came in at $7.92 billion, up from $7.5 billion and higher than the $7.86 the Street was looking for. In addition, the company tightened its guidance for the full year to $6.65 per share to $6.75. No big surprises from a strong, reliable company, which caused investors to like the solid quarterly report. Any shareholder should continue collecting that 2.1% dividend check and be happy.
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