Morning Dow Report: J&J Jumps as Consumer Stocks, Telecoms Drag the Dow Down

Early gains after favorable jobless-claims data gave way to a modest decline in the Dow, with Disney and other consumer stocks joining AT&T and Verizon on the downside. Find out why Johnson & Johnson was having a good day.

Jan 9, 2014 at 11:00AM

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.

Optimistic news on the employment front has gotten a lot of attention from investors this week, and today brought some more favorable data, with initial unemployment claims falling more than expected. Yet even as signs point to a strong overall jump in nonfarm payroll gains in tomorrow's Labor Department report, the Dow Jones Industrials (DJINDICES:^DJI) gave up early gains and traded down 60 points as of 11 a.m. EST. Only a third of the Dow 30 stocks posted gains, with Johnson & Johnson (NYSE:JNJ) among them. Meanwhile, Disney (NYSE:DIS) and other consumer stocks were under pressure, along with telecom giants AT&T (NYSE:T) and Verizon (NYSE:VZ).

Johnson & Johnson wasn't the Dow's biggest gainer, with a rise of just 0.12%. But the health care giant got a double-boost from an analyst upgrade and from its announcement that it would appeal an adverse decision affecting its OneTouch diabetes monitoring system. A Chinese agency had revoked J&J's trademark for the product, costing it exclusive rights to the device in a market that could be worth billions to the company in the long run. Whether the appeal will be successful remains to be seen, but as more companies assert their intellectual property rights in China, the stakes will rise for the emerging-market nation to recognize them more completely.

Disney fell 0.84%t. Bloomberg reported earlier today that the company could learn by Friday whether the U.S. Supreme Court will hear a case disputing the rights of start-up Aereo to retransmit broadcast signals from Disney's ABC and other major networks. Disney and its peers collect billions of dollars in fees from cable and satellite providers for the rights to retransmit their broadcast television programs. If Aereo avoids having to pay such fees, it could lead to more customers choosing its $8 monthly service over cable providers, hurting Disney's revenue.

Meanwhile, AT&T is down about 1.3% and Verizon dropped 1.6%. Both companies are having to deal with intense competition from T-Mobile, which has offered to pay termination and switching fees to lure customers from competitors' mobile networks. Already, T-Mobile's efforts have led AT&T to cut prices on its shared service plans, and further competitive pressures could be in the offing that could hurt the leading wireless network providers' profits to an even greater extent. For consumers, the news is good, but telecom stocks could suffer for the foreseeable future while the industry shakes itself out.

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Fool contributor Dan Caplinger owns shares of Walt Disney. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Johnson & Johnson and Walt Disney. The Motley Fool owns shares of Johnson & Johnson and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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