Why CBS and Barnes & Noble Jumped Today

The blue chips moved higher today despite a sharp reduction in first-quarter GDP, and CBS and Barnes & Noble led stocks higher.

Jun 25, 2014 at 10:00PM

Despite a disappointing revision to first-quarter GDP, stocks still managed to move higher today as a Supreme Court ruling gave a boost to the broadcasting industry. By the end of the day, the Dow Jones Industrial Average (DJINDICES:^DJI) finished up 49 points, or 0.3%, while the S&P 500 added 0.5%, and the Nasdaq improved 0.7%.

In its third and final estimate, the Commerce Department said GDP fell by 2.9% in the first three months of the year, much lower than its previous reading of a 1% drop. That figure was the sharpest contraction in five years, though the poor results were widely blamed by economists and businesses alike on unusually severe winter weather. While such a significant drop in GDP might normally scare away investors, data in the second quarter has been overwhelmingly positive as the economy has added more than 200,000 jobs in each of the past four months and manufacturing activity has expanded. Also today, durable-goods orders for May were reported down 1%, worse than the 0.6% gain expected, which could indicate weakness in the manufacturing sector.

In a key ruling today on the future of broadcast media, the Supreme Court decided 6-3 that Aereo, a start-up that makes mini-antennas that allow users to watch broadcast TV on Internet-connected devices, was operating illegally. The court saw Aereo as a peer of cable and satellite TV providers, which pay broadcasters to transmit their programming. As a result, broadcaster stocks rose across the board, with CBS (NYSE:CBS) up the most of the major networks, gaining 6%. The high court's ruling is likely to influence the future of not only TV, but also of cloud computing, which can sometimes straddle a similar line regarding copyright infringement.

Elsewhere, Barnes & Noble (NYSE:BKS) gained 5% after the company said in its fourth-quarter report that it will spin off its Nook media unit. Analysts had many times said separating the e-book division from the core retail operations would unlock value for shareholders, and the bookseller had been considering the move for the past two years, as it was never able to make the Kindle-competitor profitable. The Nook unit will become its own publicly traded entity by March 30, and CEO Michael Huesby said the move gave the retailer the best chance to optimize shareholder value. In its earnings report, B&N said revenue increased 3.5% to $1.3 billion despite a 22% drop in Nook revenue, and its adjusted loss per share narrowed from $2.04 a share to $0.96 a share. For fiscal 2015, which ends next May, the retailer expects a low-single-digit decline in sales. Separating the Nook unit certainly gives Barnes & Noble a better shot at returning to full health, but the bookseller faces many challenges. With sales still expected to fall, it seems hard to justify a further increase in the share price right now.

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.


Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Barnes & Noble. 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.

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