Microsoft's Increase Not Enough to Counteract the Declines of Chevron, Exxon, and Visa

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.

It was another bad day on Wall Street as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) lost 149 points, or 0.94%, the S&P 500 fell 0.65%, and the Nasdaq declined 0.47%. Those moves came despite the Thomson Reuters/University of Michigan consumer sentiment figure hitting 81.2 for January, which is better than the preliminary monthly reading, at 80.4. But even though the figure rose during the month, it was still below the 82.5 from December.

One big winner within the Dow was Microsoft (NASDAQ: MSFT  ) , as shares rose 2.66%. The move came after reports began to break that the company's search for a new CEO was over. It's believed that Microsoft veteran Satya Nadella would be taking over the top job when current CEO Steve Ballmer hangs up his hat. Shares have been languishing for some time as investors anxiously awaited an announcement of who would take over the job. After Ford's CEO Alan Mulally publicly announced he would not be taking the job, shares fell a few percent, so today's move higher shouldn't really be considered a win, just a move back to even.

On the other side of the coin, shares of Chevron (NYSE: CVX  ) , ExxonMobil (NYSE: XOM  ) , and Visa (NYSE: V  ) all helped pull the blue chip index lower today as they fell 4.14%, 1.95%, and 2.47%, respectively. Not only were these three stocks big percentage losers today, but due to their share prices, the three represent 17.48% of the Dow; when they fall, the overall index likely follows, as it did today.

The oil stocks fell after Chevron reported earnings this morning and reported a 32% decline to net earnings after revenue dropped 4% during the quarter when compared to the same time period last year. The drop was the result of lower global fuel prices and a decline in overall production. The company is looking to cut costs by roughly $2 billion in the coming year, but it's future production and profits are not very clear at this time; increased uncertainty means a lower stock price. 

ExxonMobil and Visa were both victims of their industry today. Chevron's poor performance raised concerns from Exxon investors about how it will deal with the future, while Visa's drop came after MasterCard reported earnings that missed on both the top and bottom lines, but more importantly saw a 21% increase on the expense line. A large part of that increase came from litigation expenses and, while this may be an issue only MasterCard is experiencing, it could be something the whole credit card industry will have to deal with in the future. 

There is no denying it, technological innovation is the future
There are few things that Bill Gates fears. Cloud computing is one of them. It's a radical shift in technology that has early investors getting filthy rich, and we want you to join them. That's why we are highlighting three companies that could make investors like you rich. You've likely only heard of one of them, so be sure to click here to watch this shocking video presentation!


Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 01, 2014, at 11:31 AM, techy46 wrote:

    We've got another 5% downside or 700 on the Dow to go before the bottom of 14.900 is hit. Enjoy the correction and go away in May for the Summer.

Add your comment.

DocumentId: 2819907, ~/Articles/ArticleHandler.aspx, 7/28/2014 7:24:16 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement