Yelp and Cisco Shares Drop as Sprint Surges

Shares of Dow Jones component Cisco and Yelp fell early on Monday, while Sprint shares rallied.

Jan 27, 2014 at 11:20AM

The Dow Jones Industrial Average (DJINDICES:^DJI) has dropped a slim nine points of 11:35 a.m. EST. Cisco (NASDAQ:CSCO) was underperforming its index, down almost 1% in morning trading. Meanwhile, Yelp (NYSE:YELP) posted a notable decline, while Sprint (NYSE:S) shares were surging.

New home sales disappoint
The numbers on new home sales for December came in worse than economists expected -- a seasonally adjusted 414,000 versus the anticipated 457,000. This figure, a 7% drop from November, suggests that the U.S. housing market isn't as strong as believed.

Nevertheless, Dow investors didn't seem to mind too much, keeping the blue-chip index from seeing the types of losses experienced by other major indexes fell on Monday. A more than 5% gain in shares of Caterpillar definitely helped, but traders may have been looking past Monday's data -- the Federal Reserve is set to discuss monetary policy this week, which could prove to be far more substantial.

Cisco hit by downgrade
Shares of Dow Jones component Cisco fell early on Monday following a downgrade from JPMorgan Chase from neutral to underweight. The bank also lowered its price target on Cisco from $21 to $17, arguing that the network specialist's emerging market exposure will weigh on shares as demand for its products falls.

Yelp tumbles as lawsuit goes to court
Yelp, meanwhile, was down nearly 5% early on Monday. The website has been an extremely volatile stock, so longtime investors should expect moves of such magnitude.

But Monday's slide may have been motivated by a lawsuit that will go to trial this week. A Washington, D.C. contractor sued a woman for $750,000, alleging defamation in relation to a review the woman posted on Yelp. That might not sound particularly substantial, but the outcome of the trial could undermine Yelp's entire business model: If reviewers fear financial retribution, they may stop leaving reviews on Yelp. Should that happen, Yelp could see its traffic fall substantially.

Sprint merger defended at T-Mobile
Sprint was up about as much as Yelp was down, as shares of the wireless carrier rallied more than 5% early on Monday. Like Yelp, Sprint has been a volatile stock in recent months, experiencing wild swings as investors gauge the potential for a merger with T-Mobile.

Sprint's majority owner, SoftBank, has been said to be seeking financing to acquire T-Mobile. Combined, the two companies could be a force in the wireless industry, but it's unknown if U.S. regulators would allow the merger to go through, particularly given T-Mobile's recent, rapid growth. But T-Mobile CEO John Legere talked up the merger to Bloomberg, saying that the two companies could work together to challenge the current dominant duopoly held by Verizon and AT&T.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and Yelp. The Motley Fool owns shares of JPMorgan Chase. 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.

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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. 

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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." 

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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.

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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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