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.
While the general attitude on Wall Street today was decidedly uninspired, three retailers ended as big movers Monday. With nearly a third of the exalted fourth quarter now in the books, how these businesses deliver over the rest of the calendar year will be closely scrutinized by shareholders. J.C. Penney's (JCPN.Q) stock finally caught a break, as beleaguered investors cheered bullish comments from the CEO. But with major earnings reports still looming this week, there wasn't much fanfare for the Dow Jones Industrial Average (^DJI 0.61%), as it lost 1 point, or less than 0.1%, to close at 15,568.
Wal-Mart (WMT 0.25%) ended as one of the Dow's biggest movers Monday, and while its existence isn't exactly threatened -- the company's worth a quarter of a billion dollars -- Wal-Mart still has some formidable foes to fend off. The stock added 1.4% today, as investors bid up the stock in the aftermath of Amazon.com's earnings beat last week. Not only is Wal-Mart beefing up its Web presence, where Amazon represents the biggest threat, but it's also leading the way in the gift card market, which remains a fabulously popular gifting choice in the holiday season.
As the scuffle to control online retail evolves into an all-out brawl, simply specializing in e-commerce doesn't guarantee success. Being based in China isn't necessarily auspicious either, despite the country's enviable growth rates and burgeoning middle class. E-Commerce China Dangdang (DANG), for instance, cratered 9.4% Monday, as Chinese Internet stocks slumped on a poor outlook from Web portal Sohu.com . It doesn't help Dangdang's case that Chinese tech stock NQ Mobile has been in freefall since Thursday, when Muddy Waters asserted that the company was artificially its inflating sales. Whether fairly or unfairly, Dangdang's stock price is largely tied to the performance and reputation of its Chinese tech peers, which isn't stellar at the moment.
On a brighter note, Wall Street regained some confidence in troubled department-store giant J.C. Penney today, as the stock surged 8.8%. While the future of Wal-Mart may not hang in the balance this quarter, J.C. Penney's prospects are far more tenuous; rumors of bankruptcy talks sent the stock to 30-year lows in recent weeks. Finishing the year on a strong note is almost a precondition for restoring market confidence in the company, and with management reaffirming a vision of positive same-store sales growth moving forward, there's a chance J.C. Penney can deliver.
