Why the Dow Finished the Week With a Whimper

The Dow finished nearly flat today as IBM fell and Wal-Mart threatened new rivals. Meanwhile, Chipotle landed with thud after reporting earnings this morning.

Apr 17, 2014 at 10:00PM
Longview

After three straight solid gains this week, stocks ended the holiday-shortened week mixed and mostly flat, despite strong earnings reports and economic data. Among stocks moving the market today were IBM (NYSE:IBM), Wal-Mart (NYSE:WMT), and Chipotle Mexican Grill (NYSE:CMG) as the Dow Jones Industrial Average (DJINDICES:^DJI) dropped 16 points, or 0.1%, the S&P 500 moved up 0.1%, and the Nasdaq gained 0.2%.  

Initial unemployment claims were close to six-year lows for the second week in a row, rising from 302,000 to 304,000, but that was still below estimates of 312,000. The low figure helped pull the four-week moving average to 312,000, the lowest level it's seen since October 2007. This indicates that fewer people are losing their jobs and that the labor market is well on its way to returning to full health. The total number of Americans filing for unemployment also hit a six-year low at 2.739 million. While long-term unemployment continues to be a problem, the numbers are promising for a continuing recovery.

Elsewhere, a report from the Philadelphia Fed showed manufacturing jumping in the mid-Atlantic, hitting a rating of 16.6 in the regional bank's survey, well ahead of estimates at 8.6, and up from 9.0 in March. This indicates a strong expansion of activity in the region. Shipments were particularly robust, as the report shows business picking up after a slowdown due to winter weather.

On the Dow today, IBM earnings weighed on the blue chips, falling 3.3% after reporting earnings last night. As the stock is the second-highest priced on the index, it carries a disproportionate weight, and pushed the blue chips down as the other major indexes gained. Revenue declined again at Big Blue, falling 3.9%, to $22.5 billion, missing estimates at $22.9 billion, while EPS of $2.54 matched expectations.

Also making news on the Dow today was Wal-Mart, which made waves in yet another industry today, entering the money-transfer business. The world's largest retailer said it would partner with Ria, a licensed money-transfer operator, to become the first retailer to offer a money-transfer service it's calling Walmart-2-Walmart. The service purports to undercut rival prices by as much as 50%, and will be introduced to more than 4,000 Wal-Mart locations nationwide starting April 24. The news did little to push Wal-Mart stock, which moved up 0.6%, but money-transfer specialists tumbled as MoneyGram International fell 18%, and Western Union closed down 5% after opening down 9%.

Finally, Chipotle Mexican Grill shares had a wild ride today, gaining as much as 6.5% this morning after turning in strong earnings, before finishing down 6% once it said it would raise prices. Chipotle's first-quarter sales rocked, as the top-line jumped 24.4%, to $904.2 million on a 13.4% same-store sales increase. That figure easily topped estimates of $873.8 million, though costs weighed on profits as its EPS of $2.64 missed expectations of $2.86. The stock turned south on the price hike as investors seem to think higher prices could jeopardize its growth; but after a double-digit comp increase, Chipotle's earned the right to pass on more of its food costs.

The greatest thing Warren Buffett ever said
Warren Buffett has made billions through his investing and he wants you to be able to invest like him. Through the years, Buffett has offered up investing tips to shareholders of Berkshire Hathaway. Now you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.

Jeremy Bowman owns shares of Chipotle Mexican Grill. The Motley Fool recommends Chipotle Mexican Grill and Western Union. The Motley Fool owns shares of Chipotle Mexican Grill and International Business Machines. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers