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.
A day after the Federal Reserve's highly anticipated policy meeting, in which the central bank finally began the dreaded tapering process originally expected to begin in September, the stock market was largely tranquil. Even though 57% of all publicly traded stocks lost ground on Thursday, the benchmark S&P 500 Index (SNPINDEX:^GSPC) fell just 1 point, or a trifling 0.1%. Federal Reserve Chairman Ben Bernanke, in his last major move as Fed chief, began the reduction of QE efforts with a moderate, $10 billion monthly decrease, or "taper." Come early next year, such policies will be in the hands of Chairwoman-elect Janet Yellen, as she becomes the first female head of the central bank.
Shares of the Real Estate Investment Trust, Health Care REIT (NYSE:HCN), lost 3.8% Thursday, despite a dearth of pessimistic factors in the market to send shares lower. While the stock is ostensibly attractive to income investors, with a current annual dividend yield at 5.8%, the company currently finances its attractive payout with debt. Health Care REIT, in fact, paid more than three times its earnings out to investors in dividends alone last year.
Another one of today's more notable laggards, AbbVie (NYSE:ABBV), saw its stock shed 3.1%, as shares of the pharmaceutical company took a turn for the worse after a downgrade from Morgan Stanley analysts. Morgan Stanley now sees shares at an equal weight, or neutral, level. Before, the Wall Street outfit had been bullish on Abbott Labs' young spinoff. As colleague and all-around health-care guru Brian Orelli noted in his recent piece, AbbVie's stock was already facing some downwards pressure from stiff competition in the Hepatitis C market, particularly for oral Hep-C treatments.
Last but not least, shares of oil refiner Valero (NYSE:VLO) ended 3% lower today as the U.S Environmental Protection Agency, or EPA, had to chip in its two cents -- a two cents that invariably seems to protect the environment, as it seems. Except today, the EPA was chipping in over $13 million, as the agency alleged widespread fraud in the renewable-fuel credit market. Phony credits have been circulating, according to the EPA, credits that ended up trading over the open market as if they were legitimate; credits that merely allow companies like Valero to shell out a little more cash if they want to progress (or digress) toward a Dr. Seussian, Lorax-esque world.
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