Chevron, Home Depot Jump Despite a Sluggish Dow

Medtronic makes huge news off the Dow with its surprising buy of Covidien.

Jun 16, 2014 at 2:30PM
Daily Fool

Stocks have bounced all around today, with the Dow Jones Industrial Average (DJINDICES:^DJI) up 10 points as of 2:35 p.m. EDT and its 30 member stocks split nearly even between risers and losers. Upbeat economic data has pushed Home Depot (NYSE:HD) higher, joining with Chevron (NYSE:CVX) to lead the Dow's stocks in the green so far. Meanwhile, a huge deal from the health-care sector sent Covidien's (NYSE:COV) shares surging. Let's look at what you need to know.

Home Depot ready to run?
Homebuilder confidence took a huge hit after the recession as the housing market dried up, but the measure has slowly climbed back up in the recent past. In June, homebuilder confidence climbed up four full points to a reading of 49, according to the National Association of Home Builders and Wells Fargo. That's still below the neutral mark of 50 that shows homebuilders are neither optimistic nor pessimistic about housing sales, but nonetheless it's the best monthly reading since January.

Hoime Depot Pa

Source: Wikimedia Commons.

Signs point to an upbeat future in home sales as consumers grow more confident about the economy's slow but steady rise, and a bump here would mean great things for Home Depot heading forward. The home-improvement retailer's stock has lost more than 4.8% so far this year despite gaining 1.1% today, but the company has offered hope for investors by overcoming the unseasonably harsh winter to keep sales and earnings on the upswing in its most recent quarter. Same-store sales growth jumped by more than 3% in that quarter; if home sales can make a push in the summer and chart a growth for good long-term health, Home Depot will be well-positioned to reward investors -- and continue raising its strong 2.4% dividend into the future.

Big Oil's Chevron was up 1.2% today following last Friday's sale of oil assets in Chad to the country's government for $1.3 billion. Lower production has hit the oil industry hard lately, and Chevron has been no exception: The company saw liquid production in the U.S. decline by 4% year over year in its most recent quarter. While the recent uptick in oil prices due to instability in the Middle East should benefit the company, that's not a trend that Chevron or its investors can rely on for the long term. Shareholders need to keep an eye on Chevron projects that are expected to contribute to growth in the coming years and support this stock's run.

Perhaps the biggest market-shaking news of the day hasn't come from the Dow, however. In a deal of mammoth proportions, Medtronic (NYSE:MDT), the market's largest pure medical device player, agreed to acquire competitor Covidien in a deal worth nearly $43 billion. Medtronic is already a leader in the cardiac device space, but Covidien's acquisition will add laproscopic devices and surgical tools to the company's arsenal of products. Covidien's buy will also allow Medtronic to incorporate in Ireland, where it will face slightly lower taxes. The deal sent Covidien's stock surging by more than 20%, although Medtronic's shares have taken a 1% hit.

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Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Chevron, Covidien, and Home Depot. The Motley Fool owns shares of Medtronic. 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.

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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