Stocks trended mostly higher on Monday, as investors looked to earnings season for guidance. This week will be light on economic data -- after the most recent trade balance figures come out tomorrow, the week's most highly anticipated market-moving events are Janet Yellen's appearance in Washington on Wednesday and weekly jobless claims figures the following day. If you're yawning already you're not alone -- so was Wall Street. On volume more than 25% below the trailing 3-month average, the Dow Jones Industrial Average (^DJI 0.06%) lazily made its way 17 points, or 0.1%, higher.
Walt Disney (DIS -0.45%) stock finished as one of the more exciting movers in the Dow today, adding 1.1%. Disney will announce its quarterly results tomorrow after market close, and at least one Wall Street firm was itchy to publicize its last-minute, pre-earnings take on the shares. Topeka Capital upgraded Disney stock to buy from hold, bestowing shares with a $91 price target, or a 12% premium to today's closing price. While it's probably in the retail investor's best interest to digest Wall Street analysis with a healthy dose of skepticism, Disney's entertainment assets are second to none, and the company knows how to milk them for cash. The most exciting cash cow right now might be the Star Wars franchise, which could easily spawn a handful of spinoff shows, productions, or movies, in addition to the guaranteed revenue stream it'll see from the box office and licensing deals.
Meanwhile, shares of Education Management Corporation (NASDAQ: EDMC) slumped 6.1%, as investors continued to bemoan the company's miserable earnings report. The for-profit education company forecast a loss of between $0.14 and $0.17 per share in the current quarter, a far cry from the $0.03 per share analysts expected from Education Management. The woeful projection sent the stock spiraling nearly 30% lower in a single day; the next day, credit-rating agency Moody's hit the company while it was down, downgrading its debt to Caa3 and slapping a negative outlook on it as well. With the government cracking down on the way for-profit educators try to expand enrollment, this industry -- and this company -- face a long, uphill battle.
King's "Candy Crush Saga" is easily the company's most popular game. Source: company website.
The prospects for King Digital Entertainment (KING.DL), on the other hand, aren't quite as dire. Shares of the company behind the hit app "Candy Crush Saga" soared 8.5% Monday as several analysts chimed in with optimistic price targets for the stock. King will report earnings for the first time as a public company on Wednesday, less than two months after its IPO. Three of the investment banks that initiated upbeat coverage of the stock also helped in underwriting its IPO, so as always, take these official opinions with a grain of salt. While I think King's IPO was priced conservatively, it ain't easy coming up with consistently popular gaming apps, and that's precisely what King will need to do to be a wise long-term investment.
