Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why the Dow's 15th Record of 2014 Left Disney and McDonald's Behind

On Wednesday, the Dow Jones Industrials (DJINDICES: ^DJI  ) set their 15th record of the year, rising more than 77 points on the back of Dow-component stocks in the technology sector. With signs that growth in mobile device continues to expand and even long-stagnant PC demand could finally have hit bottom and pick up for at least the remainder of the year, even some tech stocks that had lagged behind the more forward-looking companies in the sector have started to perform better. Their influence has helped push the Dow higher, but even today's record highs weren't enough to lift shares of Disney (NYSE: DIS  ) and McDonald's (NYSE: MCD  ) .

Source: Disney.

For Disney, today's roughly 1% drop comes in the heels of a potential merger in the entertainment sector. Rival network 21st Century Fox made a mammoth $80 billion takeover bid for Time Warner, and although Time Warner rejected the deal, the move represented an attempt by Fox to create a large enough competitor to go up against Disney head-to-head. A merger between the two companies would give Fox a host of lucrative cable-network properties including HBO, and it would also combine two major movie studios, opening up synergy opportunities. Disney has thus far been able to hold off Fox's competitive forays against the entertainment giant, including its Fox Sports 1 channel designed to go up against Disney's ESPN. Moreover, with Disney having a deep bench of content franchises from Pixar, Marvel, and Lucasfilm, Fox hopes to compete more effectively by joining forces with Time Warner. Despite initial rejection, Fox could well end up being a larger player in the industry, and that could create new challenges for Disney.

Source: McDonald's.

Meanwhile, McDonald's sank more than 1%. The fast-food giant has faced some big obstacles to growth lately, but the most recent sign of potential trouble comes from its own franchisees. According to a report from a stock analyst firm, McDonald's franchisees have never been more pessimistic about their future sales over the next six months than they are now, with more than a decade of data backing up the report's findings. Owners of McDonald's franchises argue that menus have gotten more complicated, causing ordering backups and requiring more training for workers than simpler menus would need. Moreover, franchisees aren't happy with McDonald's marketing, especially as certain promotional items have turned out to be flops and others require short-term changes. With the analyst expecting further declines in same-store sales for McDonald's for both June and July, the Dow's fast-food component isn't helping the overall market.

Even as the Dow sets records, you still have to look at the stocks that make up the Dow to understand their own trends. Often, you can learn as much or more from lagging stocks than you do from the companies leading the way higher.

Your cable company is scared, but you can get rich
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3032230, ~/Articles/ArticleHandler.aspx, 8/30/2015 2:12:42 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:55 PM
^DJI $16643.01 Down -11.76 -0.07%
DIS $102.48 Up +0.31 +0.30%
Walt Disney CAPS Rating: *****
MCD $96.25 Down -0.23 -0.24%
McDonald's CAPS Rating: ***