Markets Fall, but the Dow Still Notches a Few Winners

Investors grow concerned after reading the Fed's meeting minutes.

Feb 19, 2014 at 10:30PM

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.

Right around the same time the Federal Reserve released its most recent meeting minutes this afternoon, all three of the major U.S. indexes headed south. After sitting higher for the majority of the morning, the Dow Jones Industrial Average ended today's session down 89 points, or 0.56%. The S&P 500 lost 0.65%, and the Nasdaq snapped an eight-day winning streak with a decline of 0.82%.

Language in the Fed minutes that suggest more tapering in the months to come spooked investors who believe the economy is weakening. Data released both this morning and yesterday have brought news of lackluster job growth and an apparently slowing housing market. If the taper continues, some investors think the potentially fragile economy will fall back into another recession.

Only six of the Dow's 30 components finished in the black today. Two of them were Verizon (NYSE:VZ), leading the charge with a 1.2% jump, and AT&T (NYSE:T), up 0.09%. Both stocks rose on news that the FCC won't challenge a court ruling on net neutrality that was favorable to Verizon, AT&T, and other Internet providers. Instead, the commission will propose a new rule that will ban providers from blocking websites or charging bandwidth hogs like Netflix and YouTube extra for optimal delivery of their content.

Until such a rule is in place, Verizon and AT&T can claim victory. Verizon benefits more than AT&T because its FiOS service is much more widespread than AT&T's home Internet service. Furthermore, both stocks are high dividend payers, which are safe havens during times of volatility.

Another big winner today was Chevron (NYSE:CVX), which rose 0.79% while fellow oil giant ExxonMobil (NYSE:XOM) fell 0.13%. There was very little news today pertaining to either company to explain the divergence, but Chevron offers a higher dividend yield (3.5% compared with Exxon's 2.7%) and is trading at a slightly more favorable valuation (10 times past earnings, versus 12 for Exxon). What's strange is that the price of natural gas jumped another 10.77% today, while oil rose just 0.86%. That should be perceived as a positive for both companies, not just Chevron.

Regardless of whether you hold one of these telecoms or oil companies, you shouldn't be concerned about today's moves, as they don't appear to have been related to any material changes. And no one knows what will happen if the Fed keeps tapering, so there's no point in worrying about it. Just keep focusing on buying healthy companies that will continue to do well regardless of the economic condition.

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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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