Yahoo!'s Bad Earnings, Ford's Good Ones -- and Some (More) Good Housing News

Good morning, good lookin'. Here are the three things you need to know on Jan. 29.

Jan 29, 2014 at 6:00AM
Sit down, relax, and sink your face into some of the new Oreos flavors (we like "marshmallow crispy") -- because the Dow Jones Industrial Average (DJINDICES:^DJI) rebounded 91 points Tuesday from its longest losing streak since June. The Federal Reserve's two-day policy meeting has begun, but Wall Street was more focused on corporate earnings.

1. Yahoo! earnings don't earn the exclamation point
Apparently, purple isn't the new black. Shares of your favorite middle-school search engine, Yahoo! (NASDAQ:YHOO), dropped 2.4% in after-hours trading following the company's earnings report Tuesday afternoon, which missed expectations. Although its earnings rose over 2013 from 2012, Yahoo!'s overall revenues fell as display ads saw much less action.

Last year was a busy, busy one for ol' Yahoo! In the tech company's effort to become relevant again, fresh new CEO Marissa Mayer went on a buying spree that would have made Samantha Jones jealous -- those purchases included Tumblr, Evntlive, Ptch, Bread Labs, and a bunch of other random tech start-ups with ridiculously spelled names that you've never heard of.

The takeaway is that Wall Street may not have been pumped about the earnings report, but there's one Yahoo! investment that investors are gaga over: Alibaba. Yahoo! owns 24% of the Asian eBay/ fusion giant (since 2005), and Yahoo!'s revenues from Alibaba have popped 50% since last year -- now Wall Street is wondering whether Alibaba will have its IPO this year, which would reward Yahoo! handsomely.

2. Ford drives to an impressive fourth quarter
Take that, Toyota. Shares of America's classiest of auto manufacturers, Ford (NYSE:F), gained Tuesday on word that the company's $36 billion rise in revenues last quarter capped its best annual performance in years. Ford has been aggressively improving sales in the homeland, offsetting a slight decrease in sales in Europe and South America -- folks just love the Ford Focus.

The takeaway is that Wall Street isn't only excited by the fact that Ford reaffirmed its strong projections for the rest of 2014 -- Ford is also adding some muscle to its legendary F-150 truck. Ford is introducing a new, lightweight aluminum body to the F-150 this year, which will be just as strong, add even more tow capability, and cut 700 pounds from the frame -- and investors think America will buy.
3. Home prices raise the roof
Home prices rose by 13.7% in November compared with the year before. That's the hugest rise since February 2006 (which is practically 2005, for all the mathematicians out there). This is crucial measure of American wealth, since homes are the biggest assets of many families. High home prices boost net worth for Americans, which leads to more confidence and higher consumer spending, so Wall Street ate it up
The Case-Shiller home Price Index measures average home prices in 20 U.S. metropolitan areas. Despite a jump in long-term interest rates since May that caused demand for new mortgages to wane somewhat, a low supply of available homes out there is keeping prices high. Las Vegas and San Francisco had the biggest jumps, at more than 20% each. Stocks that rely on consumer spending benefited from the news, but housing stocks benefited more.
An index of home stocks practically exploded on the news. But specifically the homebuilder D.R. Horton (NYSE:DHI) jumped 9.8%. If the market is hot, people and businesses are more likely to build homes. You should feel good at your home while watching the Super Bowl this weekend (13.7% better than last year, at least).
  • The two-day Federal Reserve policy meeting ends
  • Fourth-quarter earnings: Facebook, JetBlue
As originally published on

Jack Kramer and Nick Martell have no position in any stocks mentioned.The Motley Fool recommends, eBay, Facebook, Ford, and Yahoo! and owns shares of, eBay, Facebook, and Ford. 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.

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