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.
Stocks have bounced back somewhat from earlier losses, but the Dow Jones Industrial Average (DJINDICES: ^DJI ) has failed to escape the red so far today. The blue-chip index is down more than 45 points and most members in the red as of 2:15 p.m. EST, which is still a sharp improvement from earlier when it was down nearly 100 points from the open. Telecoms have taken a big hit, with both Verizon (NYSE: VZ ) and AT&T (NYSE: T ) dropping sharply, while JPMorgan Chase (NYSE: JPM ) and other financials have also wandered into the red. Let's catch up on what you need to know.
T-Mobile takes aim at AT&T, Verizon
Verizon and AT&T stock have both fallen by nearly 2% after rival T-Mobile (NYSE: TMUS ) yesterday launched a shot across the two telecom giants' bows. T-Mobile offered to pay customers up to $350 per line to cover early termination fees for customers who abandon larger competitors for T-Mobile's network. AT&T has already perused this strategy, committing recently to paying up to $450 to customers who switch to its own network -- but T-Mobile has now raised the stakes of this bidding war even higher.
Today's drop isn't so much about T-Mobile's firepower in the battle for U.S. telecom customers: After all, the company's only the No. 4 wireless provider in the U.S., far behind leader Verizon and runner-up AT&T in customers. Verizon in particular has done a great job lately in driving growth higher, adding more than 900,000 new wireless customers in its most recent quarter and pushing wireless revenue up by 8%.
While customer growth continues, however, the bidding war for rivals' subscribers does mean that old standbys of the industry, such as early termination fees, could be moving on out. Networks will need to find new ways to retain customers and keep them away from opportunistic rivals in order to sustain wireless client growth.
In the financial sector, JPMorgan's down around 0.5% today as the bank ponders selling its prepaid card unit. JPMorgan is already declining to bring in interested new prepaid card users, but it's still servicing existing members. However, with the company's prepaid unit the victim of a hack last month -- an incident that led to JPMorgan issuing warnings to 465,000 card holders over potential breach of data -- the division is a prime candidate for a sell-off.
The bank's turned toward simplifying its operations lately in the wake of the 2012 "London Whale" incident that cost more than $6 billion in a failed derivatives bet. The plan's gone over well with investors so far: JPMorgan's stock has risen more than 28% over the past year, and focusing in on core business units should help the bank evolve as a sleeker and more efficient company -- with the added bonus of a better likelihood of avoiding messes like the London Whale event in the future.
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