Dow Dives 179 Points While Google and Lululemon Grab Headlines

Good morning, good lookin'. Here are the three things you need to know on Jan. 14.

Jan 14, 2014 at 6:00AM
Looks like Wall Street's got a case of the ol' Mondays. Fresh off of Friday's very un-cool December jobs report, the Dow Jones Industrial Average (DJINDICES:^DJI) plummeted 179 points to start the week as investors get ready for a Big Mac-sized portion of bank earnings this week. We're at a three-week low, folks.

1. Awful December jobs report still haunting markets
Dude, where are my jobs? The god-awful employment report was ripe in investors' minds Monday, driving the market sell-off. According to Goldman Sachs, the number of workers stuck at home because of the winter apocalypse weather was more than 130,000 more than usual in December. Still, 74,000 new workers in a month is bad.

Why does the employment number matter? Markets had enjoyed an average of more than 190,000 new jobs added since September. Suddenly we're served this big potato in December. A strong employment base is crucial for the American economy, since most dollars spent in this country are from consumers. If consumers aren't making money, it's a major threat for long-term corporate profits.

But the Federal Reserve said the economy was improving, right? That's why this was so scary. The Federal Reserve already moved in December to reduce stimulus, since the economy seems to be progressing well. Investors were still audibly and nervously gulping on Monday in remembrance of the very bad employment report from last week. 

2. Google stock up after big acquisition
It's getting hot in here, because Google (NASDAQ:GOOGL) just dropped $3.2 billion in cash for Nest -- the company behind the cool digital thermostat maker that your friends with technology-savvy parents own.
 
Why the big snag? Google's looking at Nest for its potential to create the "smart home" -- Nest thermostats don't just look hot, they save energy and connect with your phone. Plus they recently unveiled a smoke monitor and have plans to revolutionize other random parts of your house (heated toilet? Please?). Google wants in.
 
The takeaway is that the move by Google is a big one into a different consumer goods market. It's also not their biggest -- the company had over $56 billion in cash at the end of 2013 and spent $12.5 billion on Motorola Mobility once upon a time. But it's potentially a step in a profitable direction. The stock ended down a bit as investors digested the purchase.  
 
3. Lululemon drops big after earnings scare
Thanks for the heads-up. Yoga-pants giant Lululemon (NASDAQ:LULU) warned investors ahead of time that its earnings report is not going to look good, cutting its revenue expectations from the last quarter of 2013 from $541 million to $518 million -- and the stock dropped nearly 17% for its worst day since last June.
 
Why the bad quarter? Santa was just plain mean to retailers this year. U.S. retail sales rose by their lowest amount since 2009, and aggressive cost-cutting tactics hurt retailers from Victoria's Secret to Lululemon. Nothing about the season was namaste.
 
The takeaway is that Lululemon's bad 2013 just got even worse. First the see-through-pants debacle cost the company millions, and then its co-founder stepped down after insensitive comments about women's curves. Now that Lulu's same-store sales and customer traffic are dipping from this time last year, the company could use some aggressive stitchwork.
  
Tuesday:
  • Retail sales numbers
  • Earnings: JPMorgan Chase, Wells Fargo
MarketSnacks Fact of the Day: India consumes half of the world's whiskey.

As originally published on MarketSnacks.com

If you're looking for some long-term investing ideas ...
... you're invited to check out The Motley Fool's brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.

Fool contributors Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs, Google, lululemon athletica, and Wells Fargo and owns shares of Google, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers