Dow Dives 152 Points, Disney Stock Slumps Before Earnings

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.

The highly anticipated gross domestic product numbers came out today, giving investors a snapshot of how the economy is coming along. As it turns out, third-quarter growth was pretty solid, with GDP logging a 2.8% advance in the third quarter. The steady growth took investors by surprise, though the good news was interpreted as bad news by Wall Street. Speculation over the Federal Reserve's $85 billion monthly stimulus program -- specifically, how long that program will continue -- has a firm grip on the psyche of the market. With worries swirling that the economy's progress may tighten money supply, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) slumped 152 points, or 1%, to end at 15,594.

Walt Disney (NYSE: DIS  ) stock sure didn't help prop up the Dow, as the entertainment giant fell 2.7%. While some degree of volatility can always be expected in the hours leading up to a company's quarterly earnings (Disney reported after hours), today's slump came on the heels of another major announcement. According to The Wall Street Journal, Disney-owned Marvel will be teaming up with video streaming service Netflix to bring four original series -- based on characters in the Marvel universe -- to the popular Internet platform. Awesome, right? Not to investors, apparently, who may have expected a more exclusive deal that also included movie rights. You just can't please everyone all the time, can you? 

Speaking of not pleasing everyone, shares in fast-food giant Wendy's (NASDAQ: WEN  ) cratered 11.4%, pleasing only those coldhearted enough to short a company with the logo of a lovable redheaded little girl. Innocent cartoon children aside, investors are in the game to make money, and Wendy's third-quarter results didn't impress on that front. Sales only rose about 1% in the period, missing analyst expectations. As far as net income is concerned, Wendy's essentially broke even. The chain will have to hope its new Pretzel Bacon Cheeseburger continues to impress consumers; the ambitiously crafted burger has done quite well since its inception. 

Lastly, shares of J.C. Penney (NYSE: JCP  ) surged 5.6%, as stock in the clothing retailer continues its roller-coaster ride. Today's swing, savvy investors will be pleased to hear, was driven by some very meaningful new data today straight from the company itself. After J.C. Penney stopped providing monthly sales data last year (in fairness, it isn't required to), it resumed the practice today. Same-store sales grew from September to October, a truly welcome relief for shareholders, who've seen consistently plummeting revenue in recent years. Looking forward, let's hope these monthly disclosures keep coming, as they'll give shareholders a better idea of how a J.C. Penney turnaround is progressing. 

3 Dow stocks dividend investors need
Turnaround stories, fast-food chains, and entertainment giants all have their time and place in a portfolio, but if you're on the hunt for dividends, they're probably not your best option. If you're looking for some long-term investing ideas, you're invited to check out The Motley Fool's brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2718068, ~/Articles/ArticleHandler.aspx, 4/23/2014 5:38:28 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement