Dow Drops 35 as Consumer Stocks Prepare for Weather-Battered Earnings Results

The Dow fell modestly Wednesday, but the latest news from the Federal Reserve suggests that retail stocks could take an especially hard hit from bad weather in the U.S.

Mar 5, 2014 at 4:30PM

At first glance, Wednesday's 35-point pullback by the Dow Jones Industrials (DJINDICES:^DJI)  looked like a natural pause after the average soared almost 1.5% on Tuesday. But with the vast majority of stocks already having reported their earnings for the final quarter of 2013, investors are looking to what will come next month from first-quarter 2014 results. As the Federal Reserve confirmed in its Beige Book report today, the bad winter could well have a negative impact on the U.S. economy this quarter, especially among the retail and consumer goods areas and especially in the East Coast areas hardest hit by the weather. That in turn explains some of the skittishness among Dow components Nike (NYSE:NKE), Wal-Mart (NYSE:WMT), and Visa (NYSE:V) today.

Nike's 1.5% drop came in the wake of bad news from rival Adidas, which said overnight that poor performance in emerging-market currencies compared to the euro would have a big impact on its earnings and revenue this year. The U.S. dollar has been similarly strong compared to most of those currencies, potentially giving Nike the same exposure in its own financial results. Yet even though Nike's international business plays a huge role in its overall revenue, any sluggishness in U.S. results would also make investors worry about the athletic-apparel giant's future. With Nike set to kick off earnings season later this month because of its unusual fiscal year, investors should get an early sense of how the cold winter has affected its sales.



The good news for long-term investors, though, is that weather-related phenomena are by their nature temporary. If share prices fall as a result of momentary setbacks, that only sets the stage for rebounds when things return to normal -- and smart investors will grab opportunities on stocks they're interested in for the long haul.

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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.

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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." 

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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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