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.
With limited major economic data released today, but some big announcements on an individual basis, the major U.S. markets are having a rather quiet day. As of 1:10 p.m. EST, the Dow Jones Industrial Average (DJINDICES: ^DJI ) is higher by only 0.1%, or 16 points, while the S&P 500 has risen 0.23% and the Nasdaq has climbed 0.16%.
But company-specific news is really making a difference in the food sector today, so let's look at what's going on.
Shares of Sysco (NYSE: SYY ) are higher by 11.25% after the company reported this morning that it would purchase privately held US Foods for $3.5 billion. The companies are close competitors and this acquisition will give Sysco firm control of the food wholesale and distribution market. Sysco's CEO has already told the press that he expects heavy scrutiny from antitrust regulators.
Another food giant rising today is Kraft Foods (NASDAQ: KRFT ) which is higher by 2.33%. The jump comes after the stock was upgraded from equal weight to overweight at Morgan Stanley, which also increased its price target on Kraft to $60. Morgan Stanley said the change was based on valuation and Kraft restructuring efforts. On the surface the valuation doesn't look that cheap, but if the company can reduce costs dramatically there could be a big earnings jump in the future. Regardless, though, investors shouldn't trade solely on what one or even two analysts believe will happen.
Lastly, shares of the fast-food giant McDonald's (NYSE: MCD ) are trading lower after the company reported November same-store sales showing global growth of 0.5% and a U.S. decline of 0.8%. The company is likely going to continue to struggle for some time in growing sales while it remains the focus of negative publicity from the minimum wage battle. Long term, the company is still making lots of money and should play out as a great investment if you are willing to take a slow year here and there. Shares are down 1% today.
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