Chevron's Earnings Put a Dent in the Dow

Chevron earnings miss the mark as Microsoft keeps the Dow from bigger losses -- and possibly prepares to announce a new CEO.

Jan 31, 2014 at 2:31PM

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 is a great reminder of why the Dow Jones Industrial Average's (DJINDICES:^DJI) movements can be deceptive to the average investor. While the Dow has dropped 65points as of 2:30 p.m. EST, the price-weighted nature of the index means that the stocks with the highest prices have the most impact on the daily shifts. Enter Chevron (NYSE:CVX) and Visa, two-high priced blue-chip stocks that have hit big slumps today, respectively losing 3.5% and 2%, and have transformed a so-so day from the rest of the Dow into a bad one for the index. Meanwhile, Dow component Microsoft (NASDAQ:MSFT) has gained about  2.3%. Let's catch up on what you need to know.

Chevron's earnings disappoint
Chevron's drop comes after the energy giant released quarterly earnings this morning. The Big Oil company announced a 32% fall in net earnings, with revenue down more than 4% year over year behind weaker production and falling global crude prices. Overall production at the company slid to 2.58 million barrels of oil equivalent a day, leading to a miss on both the bottom and top lines on analyst projections. Chevron's looking to cut capital expenditure by $2 billion in the new year to compensate, but investors in this big oil company are presently looking toward a future with murky demand and cloudy prospects.

Some of the biggest news around the Dow has come from today's index leader. Reports emerged late yesterday that Microsoft has selected company veteran Satya Nadella as its new CEO, ending a months-long chase to find a new leader for the company in the wake of Steve Ballmer's announced retirement.

Nadella, who leads Microsoft's cloud and enterprise group, could bring a conservative leadership style and stable approach to the company as a decades-long insider. His grip on online services comes as Microsoft's traditional business and software divisions look to keep growth coming at the company, although Nadella will quickly face the challenge of keeping Microsoft's nascent consumer business on the upswing. Microsoft more than doubled its Surface tablet sales in the most recent quarter sequentially, but that still hasn't been enough to boost the company's push to join the clear leaders in the mobile space.

Perhaps the biggest news on the markets today comes from outside the Dow. (NASDAQ:AMZN) stock has plunged nearly 10% after the company reported earnings of its own yesterday following the closing bell. Amazon missed analyst projections on both the top and bottom lines despite a 20% growth in quarterly revenue and a 22% growth in full-year revenue for 2013. That's pushed the company to consider a possible Amazon Prime price as the company looks to maintain its dominance while bringing in more cash. So far, it hasn't impressed investors today.

Is your financial future on the right track?
Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends, Chevron, and Visa. The Motley Fool owns shares of, Microsoft, and Visa. 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