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.
As earnings season continues, the age-old quarterly catalyst hasn't been able to significantly swing markets one way or another. With the government shutdown and debt ceiling crisis dominating headlines in October, many major movements this month were driven by anticipation of and reaction to Capitol Hill developments. Even after politicians reached a temporary solution to America's debt and budget woes, Wall Street turned its attention back to its sugar daddy, the Federal Reserve. Not appreciating its sugar daddy's decision to keep mum on how long it planned to inject money into the economy, the S&P 500 Index (SNPINDEX: ^GSPC ) lost 6 points, or 0.4%, to end at 1,756 today.
Though this earnings season hasn't been too surprising in the general sense, the particulars are a different story. Communication equipment company JDS Uniphase (NASDAQ: JDSU ) , for example, plummeted 11.3% Thursday after a weak outlook spooked investors. Despite beating earnings expectations, JDS Uniphase sees anemic orders in North America going forward. While the company also beat sales forecasts, its guidance for fourth-quarter sales was quite a bit below what shareholders expected.
Digital data content storage company Western Digital (NASDAQ: WDC ) dropped 4.9%, a prompt response to Western Digital's red flag-raising news yesterday. One of the company's more significant shareholders, Hitachi, plans to sell more than 10 million shares of Western Digital stock in a secondary stock offering. While the transaction won't increase the number of shares outstanding and therefore dilute earnings, it will put pressure on share prices, if for no other reason than the law of supply and demand.
Lastly, shares of Visa (NYSE: V ) fell 3.5% and, as the Dow's heaviest-weighted component, were responsible for much of the blue-chip index's losses today. It's interesting to note that Visa didn't even disappoint on earnings, missing only on revenue. On top of that, it also initiated a $5 billion share repurchase program. Did I mention the credit card behemoth boosted its dividend last week as well? Some shareholders were worried by Visa's stagnant growth in Europe, but with earnings chugging along nicely and the company plainly committed to returning capital to shareholders, I'm not buying the rationale behind today's slump.
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