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.
Investors cheered robust jobs growth in October, sending all three major U.S. indices higher. Last month, 204,000 new jobs were created, a number that blew expectations out of the water. On top of that, more than 100% of the jobs were created in the private sector -- that's right, the private sector added 212,000 positions, while the government cut 8,000 positions. The S&P 500 Index (INDEX: ^GSPC) added 23 points, or 1.4%, to end at 1,770, giving the benchmark its fifth straight week of gains.
But a rising tide rarely lifts all boats in the stock market. Shares of Monster Beverage (NASDAQ: MNST), for instance, lost 3.4% after the energy-drink maker posted third-quarter results that underwhelmed investors. Sales and net income rose in the period, but merely posting single-digit growth rates didn't cut it for shareholders, who were hoping for a better justification of the stock's 30 P/E multiple. On top of that, regulatory risk has always been elevated with Monster, and that risk is starting to impact the bottom line as legal expenses mount.
Stock in grocery store operator Safeway (NYSE: SWY) was also down Friday, shedding 3% in trading. The U.S.-based grocer is completely out of the Canadian grocery game as of earlier this week, having sold its Canadian operations to Sobeys Inc. But more material to today's fall are reports that Safeway is negotiating with union representatives in the Baltimore and D.C. markets to prevent a strike, giving investors the potential for an all risk/no reward scenario.
Lastly, telecom services company Windstream (NASDAQ: WIN) saw its shares fall 1.7% as the company reported falling revenue and subscriber losses. Cash on hand also fell from the same quarter last year, and Morgan Stanley downgraded shares to underweight, or the equivalent of a sell rating. The Wall Street firm cited concerns about the sustainability of Windstream's dividend as a major concern affecting its decision. The telecom sector requires hefty capital expenditures from companies that wish to remain competitive, so if you're set on investing in these businesses, you may want to consider one of the better-established big boys that are devoid of liquidity concerns.
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