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 stock market fell again today, ending at one-month lows after retail numbers from a hectic November shopping period came in stronger than expected. Retail sales ticked up 0.7% last month, beating expectations, and compounding Wall Street's fears that the Federal Reserve will begin winding down its quantitative easing measures at a policy meeting next week. The central bank's so-called "tapering" was widely expected to begin at the Fed's September meeting. When that failed to materialize, markets surged; but with Wall Street bracing for a taper, yet again, the Dow Jones Industrial Average (DJINDICES: ^DJI ) fell 104 points, or 0.7%, to end at 15,739.
Shares in entertainment giant Walt Disney (NYSE: DIS ) fell only slightly on Thursday, after shedding 1.5% in trading yesterday. Today's slip, in the broader context of things, was meaningless: Disney stock began trading "ex-dividend" today, entitling anyone who owned shares at day's end yesterday to sell them today and still receive the next quarterly dividend. In theoretical terms, this will always give shares a negative handicap for the day, as short-term traders sell off the stock and lock in the next dividend. In practical terms, selling shares of one of today's most dominant entertainment companies for a few bucks in guaranteed income isn't the best long-term investing strategy.
A far smaller consumer services company, Texas-based jewelry retailer Zale (NYSE: ZLC ) , saw shares surge 15.5% on Thursday. The $480 million Zale is a tiny fish in a very large pond, which can be good and bad for investors. Right off the bat, we know it has tons of room to grow, and tremendous opportunities; the trouble comes when and if Zale fails to grow adequately, which could cause shares to tumble quickly. Thursday, shareholders were happy they accepted the volatility after Northcoast Research upgraded the stock from neutral to buy, giving shares a $16 target price. Fellow writer Michael Lewis recently touted Zale's same-store sales growth, but lamented its debt load, wondering if there might be better plays in the jewelry industry.
Finally, Greek shipping company StealthGas (NASDAQ: GASS ) slumped 5.6% Thursday, tacking on a fifth straight day of declines. Shares of StealthGas have cratered 17.9% in those five days, a period which, not coincidentally, saw its CFO resign to pursue other opportunities. Yesterday, the company also abruptly announced plans to cancel a secondary public offering of its stock, saying the issue wasn't in the best interest of its shareholders. While investors can applaud the fact StealthGas doesn't want to dilute shares, these two very recent, very unpredictable announcements spark some understandable concerns about the company's stability.
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