Dow Jones Jumps 137 Points

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.

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) was up 137 points, to 15,578, at 1:30 p.m. EST after some positive reports on the economy and better than expected earnings from Disney (NYSE: DIS  ) . The S&P 500 (SNPINDEX: ^GSPC  ) was up 16 points to 1,767.

Disney shares jumped 4.5% to $75 in early afternoon trading. The company reported quarterly earnings after market close yesterday that easily beat analyst expectations on the strength of the animated movie Frozen, which has grossed nearly $900 million worldwide. Earnings per share rose 33% to $1.03, better than analyst expectations of $0.92. Revenue was up 8.5% to $12.31 billion, better than analyst expectations of $12.25 billion. Frozen was just released yesterday in China and will be released next month in Japan, which means next quarter should be strong as well.

Disney has been pursuing a strategy of building franchises around movies. As part of this strategy it has acquired Marvel Entertainment and Pixar, which continue to pay off in both organizational talent and a stable of well-liked characters and stories. The other strong point was Disney's cable channels, where net income grew 34% to $1.28 billion, led by ESPN. ABC was a weak point, however, with a 32% drop in net income to $178 million.

While Disney's stock jump is on top for the day, 25 of 30 Dow stocks are in the green on good news from three U.S. economic releases.

Report

Period

Result

Previous

Weekly new unemployment claims

1/25-2/22

331,000

351,000

Trade deficit

December

38.7 billion

34.6 billion

Productivity

Q4 2013

3.2%

3%

The latter reports indicate together that while fourth-quarter GDP may be revised lower to roughly 3% growth from 3.2%, it does not appear we will see a drastic reduction that some feared.

Many are highlighting the new unemployment claims report, which came in at 331,000, better than expectations of 337,000. The four-week moving average was 334,000, just 250 below last week's level.

US Initial Claims for Unemployment Insurance Chart

US Initial Claims for Unemployment Insurance data by YCharts.

The basic story behind the jobs and unemployment numbers remains the same: the economy continues to add roughly 200,000 jobs a month and new unemployment claims are slowly trending lower. We have to wait till tomorrow for January's nonfarm payrolls report from the government, but I don't expect there to be a meaningful surprise in either direction there.

What's an investor to do?
In any event, your investment strategy shouldn't be dependent on a few economic reports. Constantly educate yourself, find great companies, and invest for the long term.

As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 


Read/Post Comments (0) | Recommend This Article (0)

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.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2827134, ~/Articles/ArticleHandler.aspx, 12/21/2014 11:01:21 AM

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