Sysco’s Game Changer Sends Stock Soaring; J.C. Penney Bounces

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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.

This stock market doesn't have a whole lot to anticipate this week. Thursday may prove to be the "day of data points," with weekly jobless claims figures coming out, in addition to November's retail sales numbers. While preliminary retail sales show higher volume than last year, stiffer competition may be driving margins to the floor. With little to go on, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) added five points, or less than 0.1%, to end at 16,025 on Monday.

If Thursday's retail numbers garner the same type of response McDonald's (NYSE: MCD  ) sales numbers elicited from investors, the markets could be in trouble. Although the Dow remains within 1% of its all-time high, McDonald's stock -- which lost 1.1% today, and ended as the blue chip index's worst performer -- isn't helping the Dow stay near record levels. Same-store sales in the U.S. fell 0.8% in November, although overall sales managed to gain 0.5% on a stronger European economy. 

J.C. Penney (NYSE: JCP  ) certainly has a lot riding on retail strength this holiday season, when the company finds itself at a critical juncture in its corporate history. Shares have been unapologetically swinging up and down over the last month; the stock's prospects seem to change with all the frequency of a mood ring on Jim Cramer. J.C. Penney's stock jumped 4.3% today, though after losing 20% last week alone, today's gains should be taken in perspective. Same-store sales in November just weren't strong enough for Wall Street, so the department store will need to lure in more customers in December to give shareholders confidence in the beleaguered business.

Lastly, Sysco (NYSE: SYY  ) shareholders were all smiles Monday, as stock in the food wholesaler roared 9.7% higher. Unlike many daily pops and drops akin to what we saw with J.C. Penney today, Sysco's surge came on big news that's sure to have a long-term impact on the company. Sysco agreed to buy US Foods, which is private, for $3.5 billion in stock and cash. The deal will majorly consolidate the food distribution market, and boost Sysco's sales by nearly 50% when all is said and done. The writing on the walls is clear with this acquisition: with fewer rivals and a firmer hold on its market, Sysco is in a fabulous long-term position.

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Related Tickers

9/27/2016 4:45 PM
^DJI $18228.30 Up +133.47 +0.74%
JCP $9.55 Down -0.02 -0.21%
J.C. Penney CAPS Rating: *
MCD $116.88 Up +0.35 +0.30%
McDonald's CAPS Rating: ***
SYY $49.24 Up +0.36 +0.74%
Sysco CAPS Rating: *****