The Dow Falls on Consumer Concerns, But Nike, Wal-Mart Rise Anyway

Friday brought a minor pullback for the Dow Jones Industrials based on an unexpected drop in consumer spending. But retail stocks in the Dow still climbed.

May 30, 2014 at 11:00AM

The Dow Jones Industrials (DJINDICES:^DJI) had fallen a modest 22 points as of 11 a.m. EDT Friday. Most market watchers pointed to the Commerce Department report that showed a 0.1% drop in consumer spending last month. Although bears focused on the fact that it was the first time that the measure had declined in about a year, bulls noted that March's consumer-spending figure soared 1%, and so the two figures smooth out to reasonably strong activity over the last couple months. Moreover, Dow consumer giants Nike (NYSE:NKE) and Wal-Mart (NYSE:WMT) posted gains despite the weak data.

Source: Nike.

Nike gained 0.3% as investors turn their focus to the coming FIFA World Cup soccer tournament in Brazil, which begins in less than two weeks. Nike has worked hard to compete against its primary rivals to sponsor apparel, footwear, and other high-profile items for players on as many of the 32 teams playing in the 2014 installment of soccer's world championship as possible. Nike hopes that top players like Portugal's Cristiano Ronaldo, England's Wayne Rooney, and Brazil's Neymar will make it well into the knockout round in order to maximize its exposure to the world's most popular sport, where the Dow component and athletic giant has historically lagged behind Adidas. Given the premium that consumers are willing to pay for Nike products, the company shouldn't be too concerned about a short-term dip in consumer spending.


Source: Wal-Mart.

At the other end of the spectrum, Wal-Mart picked up 0.7% despite catering to a customer base that is much more sensitive to economic conditions. Wal-Mart has been fighting against negative comments from a major proxy-advisory firm, which recommended that shareholders vote against the Dow component's compensation plan and also recommended voting against former CEO Michael Duke and current Chairman Rob Walton. Wal-Mart has argued that the proxy firm is using too much information from a source that is potentially biased. Moreover, from an economic standpoint, if consumers are ramping down on their spending, then they're more likely to go to discount retailers like Wal-Mart rather than paying up for premium retail offerings.

The Dow Jones Industrials are definitely sensitive to the health of the consumer economy, and it makes sense to watch the latest figures to see how consumers are faring. But today's moves in the Dow also emphasize how important it is to look beyond a single month's figures to capture a longer-term perspective on the health of the economy. Otherwise, you can draw bad inferences about the stocks that serve consumers the most.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Nike. The Motley Fool owns shares of Nike. 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

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, 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