Dow Hits Another Record High; Rite Aid Selloff Intensifies

United Continental, the victim of bad press, slumps, while Disney stock ends as blue chip standout

Jun 9, 2014 at 6:27PM

Investors continued to show their confidence in the wider economy, as the bulls outnumbered the bears in the stock market today. Led by shares of Walt Disney (NYSE:DIS), the Dow Jones Industrial Average (DJINDICES:^DJI) finished at a record high yet again on Monday, adding 18 points, or 0.1%, to end at 16,943.

Walt Disney stock finished as the most magical blue chip stock today, tacking on 1%. Disney is seeking to replicate the incredible success it's seen with its Marvel movie franchise -- the company has produced a slew of films based on Marvel comic book characters like Iron Man, Captain America, the Incredible Hulk, and others -- when it reboots the Star Wars franchise next year. The plans to monetize the globally recognized Star Wars name entail the strategy of spinoff series and films, which fellow financial writer John Casteele thinks may be going too far.

Meanwhile, while Rite Aid (NYSE:RAD) might not own the rights to any multibillion-dollar film franchises, the drugstore's worth a solid $7 billion by Wall Street's estimation, a valuation that's soared in recent years as Rite Aid's margins have edged higher. Rite Aid shares, however, stumbled 4.4% today, and have lost more than 11% in the last week alone. Wall Street worries that Rite Aid's incrementally increasing margins could be at risk, as the company reported disappointing projected earnings and sales for the first quarter of 2015. For the moment Rite Aid's pullback looks like nothing more than a hiccup in its long-term growth prospects, but if the slowdown continues for a few more quarters, investors may want to take a closer look at Rite Aid's growth.


Boeing's 787. Image source: United Continental website

Lastly, shares of United Continental Holdings (NYSE:UAL), the second largest domestic airline, lost 3.5% on Monday. A headline in The Wall Street Journal today called United Continental a "sick bird." The piece notes that customers haven't been thrilled with the company's service -- where it earns consistently low marks -- and investors haven't been overjoyed with its profits, which have been frustratingly inconsistent. While United's PR team is probably working overtime to combat today's negative press, the company itself has one brief-lived competitive advantage over U.S. peers: United Airlines is the only U.S. carrier to fly Boeing's 787 Dreamliner, which was recently approved by the FAA to fly a wider range of routes.

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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.

The Motley Fool recommends and owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. 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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