Morning Dow Report: Cisco, Disney Decline While Intel Moves Higher

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 Dow Jones Industrials (DJINDICES: ^DJI  ) continued its recent drop today, falling 72 points as of 11 a.m. EST in light of ongoing fears about the strength of the economy and the future of monetary policy. A 0.7% rise in retail sales for November spurred expectations for reduced Federal Reserve bond-buying in the near future, and soaring jobless claims didn't seem to reverse that thinking. Cisco Systems (NASDAQ: CSCO  ) and Disney (NYSE: DIS  ) were among the Dow's worst performers, while Intel (NASDAQ: INTC  ) managed to climb.

Cisco added to its losses from yesterday, falling another 2% as CEO John Chambers made a presentation at a meeting of financial analysts this morning. Chambers blamed some of Cisco's reduced revenue on product transitions that reflect new long-term innovation, but he also pointed to challenges in emerging markets as weighing on results. Even signs of greater strength in the U.S. enterprise market couldn't reassure investors, and the stock fell to levels not seen since May as a result. After its call last month guiding future revenue lower, Cisco simply needs to find ways to grow sales in order to reassure shareholders of its long-term strength.

Disney declined nearly  2%. The media giant is facing an increasingly competitive environment, as speculation over whether Scripps Networks Interactive (NYSE: SNI  ) might receive a takeover bid raises concerns about how far companies will have to go to buy up valuable content. Disney might be a potential player for Scripps, given its valuable Food Network, Travel Channel, and HGTV properties. In the long run, escalation of content values should be a net positive for Disney, given its extensive production capabilities. Yet after a big run higher this year, Disney investors might be reluctant to push shares up further.

Intel gained almost 0.53%. It's unlikely that putting the logo on the inside of the jerseys of soccer club FC Barcelona would explain the jump, although the marketing move did receive a lot of attention, as the chip giant has to hope for the team to score goals in order for viewers ever to see the Intel Inside mark. More generally, though, investors seem more satisfied with Intel's efforts to become relevant in mobile while also tapping the continuing potential of the PC market to handle certain needs that mobile applications will never replace.

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  • Report this Comment On December 12, 2013, at 12:35 PM, cubsblue23 wrote:

    DIS is down only because of short selling. They will have to cover soon. Look for a big rally in the next week or so. There is no basis for a sell and this stock is still undervalued by about $20.00.

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