General Electric Falls as Best Buy Trips Again

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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.

Today, a mix of economic news and earnings reports drove the markets, and stocks, in general, headed lower. With Intel and American Express reporting yesterday after the closing bell, and General Electric (NYSE: GE  ) announcing earnings this morning, the Dow Jones Industrial Average (DJINDICES: ^DJI  )  attracted a fair amount of attention today. Only nine of the 30 Dow stocks ended the session in the black. However, due to the price weighting of the index, the Dow actually gained 41 points, or 0.25%, today, while its fellow indexes, the S&P 500 and Nasdaq, fell 0.39% and 0.5%, respectively.

On the economic front, the preliminary University of Michigan Consumer Sentiment Index for January was released today. Economists were expecting a rise from December's 82.5 to 83.5, but the actual figure came in at an 80.4.

Additionally, a few figures from the housing industry didn't help spur confidence. The U.S. Census Bureau released data indicating that new home construction was down 9.8% in December when compared to November. December starts were off by 7%, and completions fell 8.2% in the month. 

As for earnings reports, check out what Intel and American Express reported by clicking here, or stick around to learn about General Electric's report.

Shares of the conglomerate fell 2.28% today after the company reported revenue above estimates, and earnings in line with expectations, but disappointed investors on the margin side. The company had a goal of expanding its margins on the industrials side of its business by 0.7 of a percentage point, but only managed to post an increase of 0.66 of a percentage point. A few analysts have already announced they are maintaining their hold ratings on the stock, as they want to see more progress from GE before increasing their calls. Additionally, many believe that GE made the quarter due to cost cutting, which will not always be there. Thus, the margin growth matters, even if it's only a small amount. 

Outside the Dow, another big loser today was Best Buy (NYSE: BBY  ) , which lost 8.95%. Today's move comes after the stock fell 28.59% yesterday. Typically after a move of that size, a stock will rebound slightly the following day, but that certainly wasn't the case today. The reason is likely that the shares of the electronics retailer were up 237% in 2013, as investors were betting on the company turning around its falling sales as it revamped its stores, offered more competitive prices, and pushed for a better online presence. But the news that same-store sales had fallen 0.9% during the holiday shopping season indicates that the changes that the company has made are still not working. This may be a sign to investors that Best Buy may end up like its previous competitor, Circuit City.

We all know that the rise of and other online retailers have hurt Best Buy during the past few years, and many investors have looked at the explosion of online shopping as a reason to own UPS (NYSE: UPS  )  or Fedex. But this morning, UPS told investors that, due to the high volume of online shopping this holiday season, the company was lowering its fourth-quarter earnings guidance to a range from $5.03 to $5.26, well below analysts' consensus of $5.49 per share. Furthermore, UPS believes that its full year 2014 earnings per share will grow within its targeted 10% to 15% when compared to 2013 results. While UPS may struggle when higher-than-expected volumes come in, overall, the company believes that it will see higher volumes in the future, and will be able to handle them more efficiently. 

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Matt Thalman

Matt primarily covers the Dow Components, the Major Indexes daily moves, Consumer Goods stocks, and General Investing Topics.

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