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.
Yesterday, investors got a much-awaited reprieve from Wall Street's recent slump, and the Dow Jones Industrial Average (DJINDICES:^DJI) broke its five-day losing streak. But the bears were out in force again on Wednesday, as January's pullback reared its ugly head once more. Although the Federal Reserve policy meeting took center stage today, investors seemed to be more worried about the stability of emerging markets and their currencies. Turkey's central bank took drastic moves on Tuesday in an emergency meeting, raising its benchmark one-week lending rate for banks from 4.5% to 10%. The Dow, fearing a currency contagion, shed 189 points, or 1.2%, to end at 15,738.
One of the Dow's biggest laggards was Home Depot (NYSE:HD) stock, which lost 2.4% Wednesday. With no particularly negative news to speak of regarding the home-improvement giant, today's decline can largely be chalked up to the mood of the market at large. That said, Home Depot shareholders have been amply rewarded in recent years with the revitalization of the U.S. real estate market, and data today from the Mortgage Bankers' Association painted a bleaker picture of real estate growth going forward. Applications at mortgage lenders for the week ending Jan. 24 plunged 12% from the same week last year, indicating softer demand for homes. I think the market's extrapolating too hastily and would encourage long-term investors to consider broader trends before dumping shares.
Or you could do what TiVo (NASDAQ:TIVO) stock did today -- shares ignored trends altogether and tacked on 1.2% in the face of market pressure. TiVo, which was a pioneer in the DVR market, announced the acquisition of Digitalsmiths before the market opened this morning, and shares didn't trade in the red the whole day. Wall Street applauded the $135 million cash purchase of the cloud-based software, which "allows Pay-TV operators to deliver an advanced user experience integrating search, recommendations, discovery and browsing across a variety of devices," according to the press release. Not only has TiVo seen the light and shifted its focus to software rather than hardware, but it also approved a $100 million share buyback. Well played, TiVo.
Lastly, shares of the $2 billion molecular diagnostic business Myriad Genetics (NASDAQ:MYGN) surged 4.3% Wednesday after the company put out a press release touting its prostate cancer prognosis test Prolaris as a game-changer in its field. Myriad Genetics claims that the most recent study "demonstrated the significant clinical value of Prolaris to physicians who are treating men with prostate cancer." Only time will tell what the implications of Prolaris will be in the future, but if its claims are true then it physicians shouldn't take long to get on board with the product.
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