Dow Down 265 Points This Week; DryShips Keeps Roaring 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 Industrial Average (DJINDICES: ^DJI  ) managed to end a mostly negative week on a good note Friday, closing modestly higher as a budget deal for 2014 and 2015 passed in the House and makes its way to the Senate. Next week the Senate will vote on the budget as well as formally vote on the president's next nominee to head the Federal Reserve, Janet Yellen. Although the Dow opened and closed the week with gains, it managed to slump pretty dramatically in the middle period, giving the index 265-point losses for the week. Today, the Dow lost 15 points, or 0.1%, to end at 15,755. 

Shares of the Home Depot (NYSE: HD  ) outperformed the market today, adding 0.6%. Shares are up more than 27% this year, as the home-improvement retailer reaped the benefits of an unabashedly bullish real estate market. Home Depot has been an indirect beneficiary of the Fed's loose money policies, which have driven interest rates to near-record lows, allowing borrowers to access capital more easily. As my colleague Matt Thalman noted earlier today, Home Depot stock also benefited from an upgrade by Raymond James, which thinks the retailer is quite capable of sustaining growth independently of the Fed's accommodative policies. 

On the other side of the Atlantic, Greek shipping company DryShips (NASDAQ: DRYS  ) saw shares rally 4.9% Friday, continuing the stock's amazing performance in 2013. Long-term shareholders are beginning to feel vindicated, with DryShips shares having jumped 128% this year alone. Even after those remarkable gains, though, the stock remains 36% lower than it was just three years ago -- a three-year period that many Greek companies would rather forget. Moving forward, DryShips is a risky play with a few potential catalysts that could either boost or ruin the share price. On the one hand, it's loaded with tons of debt; on the other, it has some exposure to a thriving drilling industry and could make a ton of money in the future if it starts offering more routes through the Arctic Sea. 

Finally, shares of Midwest grocer Roundy's (NYSE: RNDY  ) fell 7.2% after the company announced its intention to sell 27.6 million shares in order to raise additional capital. There were more than 45 million shares outstanding at the end of September. In addition to that whammy, credit ratings agency Moody's gave a speculative rating to Roundy's proposed $200 million in notes, which the company will use to repay another loan and acquire a number of Dominick's locations from rival Safeway . This means Roundy's will have to reward lenders with high levels of interest for the inherent risk in the company's second lien debt. 

The Motley Fool's top stock for 2014
Stocks like DryShips have handsomely rewarded investors this year, as the stock market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2764952, ~/Articles/ArticleHandler.aspx, 9/22/2014 6:18:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement