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

Consumer sentiment falls from December to January and so did the markets.

Jan 31, 2014 at 9:00PM

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. 

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Matt Thalman owns shares of Microsoft. 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.

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