Rite Aid Slumps Again on Margin Worries, Dow Rallies to Record Close

Wal-Mart's annual shareholder meeting does little to affect the stock; Melco Crown Entertainment shares slip as Macau deceleration in focus.

Jun 6, 2014 at 6:29PM

Spurred on by another month of strong jobs growth in May, stocks were up across the board on Friday. The Dow Jones Industrial Average (DJINDICES:^DJI) notched a record closing high after the Labor Department said that nonfarm payrolls increased by 217,000 last month, and total employment is now higher than its previous peak in January 2008. Twenty-one of the Dow's 30 components ended higher, as the Dow tacked on 88 points, or 0.5%, to end at 16,924.

Wal-Mart (NYSE:WMT) was one of the few stocks in the Dow that didn't benefit from Wall Street's bullishness Friday, as shares failed to break even, losing 0.1%. At the annual shareholders meeting today, investors got a look at the company's new 47-year-old CEO Doug McMillon, who took over from Mike Duke in February. While McMillon's 30-year rise from hourly associate to top dog is indeed an inspiring career arc, many of Wal-Mart's current employees don't feel like their employer cares much about their financial livelihood. Wal-Mart workers across the nation staged strikes this week for better wages in conjunction with the shareholder meeting.

Meanwhile, shares of drugstore Rite Aid (NYSE:RAD) continued their two-day sell-off, losing 1.9% on Friday. The stock was clobbered to the tune of 7.4% yesterday, after the company said higher drug costs would crimp its profit margins in fiscal 2015. Rite Aid's business and stock have been on a steady tear for the last few years, as improved margins have fueled tremendous bottom-line growth. It's troubling to see margins slip like this, but even after Rite Aid's pullback, the stock is priced for tons of growth, so it's hard to say it's a screaming buy right now.

Altiramacau

One of Melco Crown's Macau hotels, Altira. Source: company website

Shares of Melco Crown Entertainment (NASDAQ:MPEL) took an even bigger hit today, shedding 2.8% in trading. The casino industry in Macau -- the only place in China where gambling is legal -- has captured Wall Street's attention in recent years, as the legal monopoly that companies like Melco Crown enjoy in the region has generated jaw-dropping profits. Melco Crown itself swung from losing $2.4 billion in 2009 to generating nearly $5 billion in profits last year. But a recent slowdown in Macau's gaming growth has analysts concerned, and Wells Fargo and FBR Capital each issued notes to investors today highlighting the recent deceleration in the area.

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.

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

The Motley Fool has no position in any of the stocks mentioned. 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