Jobless Claims Report Pushes Stocks Higher

Major indexes move higher after decent jobless claims report.

Feb 20, 2014 at 1:00PM

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.

The latest weekly jobless claims report from the Labor Department today just missed meeting expectations, showing a very solid 336,000 new claims versus analysts' projection of 335,000. The new figure represents a 3,000 claim decline from the previous week, which many economists say should be seen as a win because it shows that even with the bad weather and a slowdown in business, workers are not being laid off.  

With that economic news and help from a number of solid earnings reports, as of 1:05 p.m. EST the Dow Jones Industrial Average (DJINDICES:^DJI) was up 112 points, or 0.70%, the S&P 500 was higher by 0.61%, and the Nasdaq had risen 0.48%.

Tesla's latest earnings report is certainly helping push the markets higher, while Wal-Mart's (NYSE:WMT)report drove the retailer's stock down 1.8%.

The world's largest retailer posted fourth-quarter revenue of $129.71 billion, while analysts were looking for $129.52 billion. Earnings per shares came in at $1.60, above the $1.59 Wall Street was looking for. So what's the problem? Same-store sales declined 0.4%, comparable traffic fell 1.7%, and guidance for the future was below what analysts wanted to see. For the first quarter of 2014, management believes it will post EPS within a range from $1.10-$1.20; the Street was looking for $1.23. For the full year, management gave a range from $5.10-$5.45, while the consensus estimate had been $5.55.  

Furthermore, it is now also being reported that Wal-Mart may increase its minimum wage, ahead of any government action. Wal-Mart officials have stated they are neutral on the issue, but that management is considering the benefits of raising hourly wages nationwide. Investors may not like such a move, especially during a time when same-store sales and traffic are falling and growth outside of building news stores seems extremely difficult. The higher costs associated with a higher minimum wage will likely hurt profit.

Another company considering raising its minimum wage ahead of any government mandate is Gap (NYSE:GPS). The retailer said yesterday that it would this year increase the minimum wage for all employees to $9 per hour and then to $10 in 2015. This will affect 65,000 employees nationwide. Shares of Gap were up 0.6%, indicating investors are likely not that concerned about the increase in cost.  

Another retailer making news today is J.C. Penney (NYSE:JCP) as an analyst at Sterne Agee removed his $3 price target on the stock altogether. This indicates that Sterne does not believe J.C. Penney has much longer to survive as a freestanding company. Analyst Chuck Grom noted that he believes the company will have a credit crisis in the near future, and shares will plummet. A credit crisis also likely means the company will have to file for bankruptcy, a bad sign from which few organizations emerge. Penney shares were down 5.2% by early afternoon  

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Matt Thalman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

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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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