Dow Retreats From Highs; Macau Slowdown Hits Melco Crown Shares

Conn's suffers on Wall Street despite yesterday's blowout quarter; Wal-Mart braces for strikes at annual conference tomorrow.

Jun 3, 2014 at 6:06PM

The stock market put the brakes on the Dow Jones Industrial Average's (DJINDICES:^DJI) hot streak today, as the Dow finished lower for only the second time in its last nine sessions. Even with U.S. factory orders gaining more than expected in April -- advancing 0.7% -- Wall Street couldn't justify sending stocks to record highs for a third consecutive day. With Wal-Mart (NYSE:WMT) and 18 of its blue-chip peers all finishing in the red, the Dow lost 21 points, or 0.1%, to end at 16,722. Melco Crown Entertainment (NASDAQ:MPEL) and Conn's (NASDAQ:CONN) also ended the day as notable laggards -- even though yesterday they were some of Wall Street's most brilliantly shining stars.

Mo' money, mo' problems
While Wal-Mart's 0.1% loss today is certainly insubstantial, the world's largest big-box retailer faces some gargantuan challenges that every Wal-Mart investor should be aware of. The most obvious threat to its business is, which has more than tripled its yearly revenue in the last five years (Wal-Mart's annual revenue was up just 16.7% in the same period). But if Amazon is the elephant in the room, the other large mammal in the room is the issue of labor costs and employee treatment. Wal-Mart is currently fighting allegations that it illegally punished workers who went on strike for higher pay in 2012 and 2013. Similar strikes are expected to occur again tomorrow in more than 20 cities, as the company holds its annual shareholder meeting.


Melco's 5-star-rated Altira Macau. Source: Melco Crown Entertainment.

Shares of a company making its bread and butter halfway across the world -- the Hong-Kong based Melco Crown Entertainment -- shed 5.9% today. Stock in the Macau casino operator enjoyed a 3.3% rally just yesterday, on the heels of robust Chinese manufacturing numbers. But just 24 hours later, Macau casinos were dealt a bad hand: gaming revenue increased by 9.3% last month in Macau. While that's the kind of growth Las Vegas casinos would be drooling over, the enormously high expectations for Macau made the number a disappointment.

Electronics and consumer goods retailer Conn's also had a rough go of it today, losing 3.1% by the sound of the closing bell. Unlike Wal-Mart and Melco Crown, Conn's fell despite a lack of looming threats, subpar May numbers, and mammals in the room. In fact, Conn's stock rallied 6.9% yesterday on the heels of a blowout first-quarter report in which same-store sales jumped 15.6% and customer credit improved. Today's pullback shouldn't concern long-term investors, especially after the company's most recent impressive quarter.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

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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.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

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." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

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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