Morning Dow Report: UnitedHealth, Goldman Earnings Outweigh McDonald's Bounce

Earnings reports weren't as optimistic as they'd been earlier in the week, with UnitedHealth Group and Goldman Sachs falling even as McDonald's posted gains.

Jan 16, 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.

Investors had hoped that positive earnings momentum would continue to drive stocks higher, but this morning's figures from two major components of the Dow Jones Industrials (DJINDICES:^DJI), as well as a negative warning from Best Buy, sent the blue-chip index down 91 points as of 11 a.m. EST. UnitedHealth Group (NYSE:UNH) and Goldman Sachs (NYSE:GS) both fell after giving their earnings reports, offsetting a gain from McDonald's (NYSE:MCD) based on encouraging industry figures.

UnitedHealth dropped 3.3% even though the health insurer added 4.5 million members during 2013 and posted an 8% jump in revenue for the fourth quarter, pushing earnings up 15%. Success in its Optum segment also added to the company's bottom-line gains, with operating earnings jumping 43% for the pharmacy-benefits and consulting-services division. UnitedHealth also confirmed its previous guidance for revenue and earnings for 2014, but investors remain concerned about the potential for cuts in government program reimbursement rates and the potential impact on UnitedHealth's profits.

Goldman Sachs dropped 1.8% as the bank reported that profits fell 21% in the fourth quarter compared to the year-ago period, on a 5% drop in overall revenue. Goldman's investment-banking division was particularly successful, seeing profits rise by 22%. But trading results from the fixed-income and other markets hurt Goldman overall, as revenue from client trading fell 15%; a drop in bond-underwriting activity also contributed to the fall. Despite the falling share price, Goldman's results were actually better than most investors had expected. But with the likelihood of continuing pressure on the bond market, Goldman could keep struggling because of its traditional reliance on fixed income as an area of strength.

McDonald's gained 0.5% after the National Restaurant Association said late yesterday that it projects restaurant-industry revenue to grow 3.6% from 2013 levels. With expectations of $683 billion in sales for 2014, the gains are expected to come primarily from raising menu prices. Moreover, with higher labor costs and upward pressure in food prices for commodities such as beef, McDonald's will have to work hard to turn any added revenue into bottom-line growth. Nevertheless, McDonald's expects to come out with a slate of new products and promotional offerings to try to bolster sales and boost its overall results this year.

The No. 1 way to lose your wealth without ever even knowing it

You've fought hard to build wealth for you and your family. Yet one all-too-common pitfall could completely derail your dreams before you even know it. That's why a company The Economist hails as "an ethical oasis" has isolated five simple questions you must answer to ensure that your financial future is really secure.

Can you answer YES to all five of these eye-opening questions?

Click here to find out -- before it's too late!


Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Goldman Sachs, McDonald's, and UnitedHealth Group. The Motley Fool owns shares of McDonald's. 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information