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Nike, The Fresh Market, and UPS: It Was All About Retail Today

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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.

For the first time ever, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) managed to close above the 16,000 mark after gaining 54 points, or 0.34%, today. The blue chip index now rests at 16,064. Today was the ninth time during the month of November that the Dow has set an all-time closing high. The S&P 500 also had a record-setting day, as it finished up 0.5%, and above the 1,800 mark, at 1,804 -- which is also a new all-time closing high. As for the Nasdaq, no record today, but it was the best-performing index, rising 0.57%.

The moves higher were likely spurred by the words of the Atlanta Federal Reserve President Dennis Lockhart. During an interview on CNBC this morning, he said that the Federal Reserve is prepared to sustain the economy with easy monetary policies for as long as necessary. But he also stated that tapering of the Fed's bond-buying program will continue, even though the quick and strong recovery that many of the central bank members wanted to see has yet to develop. All in all, Lockhart sounded rather bearish that a tapering would happen in 2013, or even early in 2014. 

On an individual stock basis, a number of retailers had a rough day. This morning, I pointed out a few of the laggards, but despite those losers, one of the Dow's biggest retail stocks, Nike (NYSE: NKE  ) , rose 1% this afternoon. The move came after the athletic apparel company announced that its board of directors approved an increase to the company's quarterly dividend. The previous quarterly amount was increased from $0.21 to $0.24, which represents a 14% jump. This increase marks the 12th consecutive year that the company has increased its dividend and, despite the fact that its current yield is only 1.1%, the dividend amount has increased by 800% since Nike began its yearly dividend increases. While most investors don't consider Nike a slow-growing dividend-paying stock today, it should be seen as a good thing. Even though the dividend has been increased 12 consecutive years and by 800%, it only yields a little over 1%, which means the price appreciation is still good. From where I am sitting, that is a win-win scenario, and investors should consider Nike when looking for new stocks.  

Outside the Dow, a big loser was The Fresh Market (UNKNOWN: TFM.DL  ) , which fell 18.91% today. The move was the result of a poor earnings report and management lowering their forecast. Revenue came in at $364.5 million, which was up from $321.5 million last year; but analysts wanted to see $373.4 million. Earnings fell to $0.23 per share, which is the same number that the company posted a year ago, but below the $0.26 which had been expected by Wall Street. Then, to top it all off, the company cut its fiscal year 2013 earnings from a range of $1.50 to $1.55 per share down to $1.42 to $1.47 per share. Again, that falls short of the $1.53 per share that analysts were looking for. 

Finally, United Parcel Service (NYSE: UPS  ) announced yesterday that it will be increasing its prices by 4.9% in 2014. The move follows similar announcements made by rival FedEx and the United States Postal Service. This move should not be seen as a negative one for the company considering its competition also increased their prices. UPS will not likely be pricing itself out of the market, and shares of the company rose 0.84% today. But the world of retail and shopping requires shipping and, since it has increasingly started to move online, the move could hit both the wallets of consumers and large retailers such as  (NASDAQ: AMZN  ) and Wal-Mart, which offer free shipping on purchases over a certain dollar amount. Wal-Mart recently lowered its free shipping to purchases of more than $35 for the holidays, where it used to be for purchases of more than $50. Amazon has tweaked its policy in recent weeks, as it increased it from a minimum of $25 to $35. It will be interesting to see if any of these big retailers again make minimum increases after the holiday shopping season is over to better align their costs with UPS's increase. 

A deeper Foolish perspective

To learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

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Related Tickers

9/23/2016 4:55 PM
^DJI $18261.45 Down -131.01 -0.71%
AMZN $805.75 Up +1.05 +0.13% CAPS Rating: ****
NKE $55.15 Down -0.26 -0.47%
Nike CAPS Rating: *****
TFM.DL $0.00 Down +0.00 +0.00%
The Fresh Market CAPS Rating: ***
UPS $109.21 Down -0.46 -0.42%
United Parcel Serv… CAPS Rating: *****