Disney Defied the Dow's Drop Today

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has rallied 150% from its lows of 2009, and most Americans are facing a far brighter financial future than they did just five years ago. But the recovery has been slow to translate to the jobs market, and new employment data didn't do much to dispel that fact on Wednesday. According to the ADP, private payrolls increased by 139,000 in February, below the consensus 150,000 estimate. With consumer spending so important to the growth of the economy, investors should pray that Friday's nonfarm payrolls report from the Labor Department provides a rosier outlook. The Dow lost 35 points, or 0.2%, to end at 16,360. 

Although Walt Disney (NYSE: DIS  ) stock, which added 1.2% today, has been doing just fine without mind-numbing jobs growth, you can bet your bottom dollar the company doesn't want the 6.6% unemployment rate to linger any more than you or I do. Although movies can still be successful in a bad economy -- is there a better time to "escape reality"? -- theme parks don't tend to do so well when consumers are cash-strapped. Disney's net income grew at about 20% a year from 2010 to 2012, as the economy slowly recovered, and now Disney's focusing on the future by embracing cord-cutting content distribution in the age of streaming. 

Shares of DryShips (NASDAQ: DRYS  ) , a $1.7 billion Greek shipping and drilling company, jumped 6.7% today as a common gauge of daily shipping rates rose 3.8%. The Baltic Dry Index, or BDI, measures the daily spot prices for shipping, which tend to fluctuate wildly with the supply and demand for the materials being shipped. DryShips, in a bold strategic move, has voluntarily exposed itself to this volatility by offering primarily day-to-day rates for its shipping services. Where many shippers prefer to secure a more predictable stream of revenue by locking in long-term agreements, DryShips is walking the plank, gambling rates will keep rising and it will reap the rewards. 

Sometimes called "the Facebook of China," but never accurately, shares of Renren (NYSE: RENN  ) roared 22% higher today. Facebook, which made about $1.5 billion last year and just acquired messaging service WhatsApp for $19 billion, is hardly comparable to the $1.76 billion Renren in reality, but sometimes reality doesn't matter to Wall Street psychology. In reality, Renren is unprofitable and just sold the remainder of its stake in group-buying site Nuomi to the Chinese Google, Baidu, for an undisclosed sum. Nuomi's growth had been a shining star in an otherwise uninspiring Renren, but then again I may be proven wrong when the company reports fourth-quarter earnings on March 18. Today's rally wasn't driven by any fundamental improvements in the business, and may have simply been the result of following the momentum after yesterday's 9.5% jump.

The $2.2 trillion war for your living room begins now
Disney knows cable's going away. You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.


Read/Post Comments (0) | 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.

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: 2865745, ~/Articles/ArticleHandler.aspx, 11/27/2014 6:48:31 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...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement