King Digital Suffers Setback; 1 Stock Keeps Dragging on the Dow

Staffing agency Robert Half International blows out expectations; McDonald's is living in a McNightmare.

Jul 23, 2014 at 6:00PM

For a third day in a row, McDonald's (NYSE:MCD) was a drag on the Dow Jones Industrial Average (DJINDICES:^DJI), as it deals with a meat scandal in China and disappointing second-quarter results. Boeing, while able to beat Wall Street expectations, also pulled the Dow lower, as analysts raised questions about the aerospace company's cash flow. By Wednesdays' end, the Dow had erased 26 points, or 0.2%, to end at 17,086.

Several questions loom large for McDonald's shareholders today, not least of which is how the company will reignite its same-store sales growth, which literally did not budge last quarter. McDonald's itself was looking for 0.8% same-store sales growth in the quarter, and was unable to live up to even those pitifully low standards. But arguably the biggest issue facing Mickey D's right now is how to recover from the PR nightmare that began earlier this week with reports that a meat supplier in China was selling expired meat to the restaurant. Since then McDonald's has halted orders from the supplier as it investigates, but shares lost another 1% today in the wake of the fallout.


Many wonder if the mood will be so jolly for the creatures of Candy Crush when the changes go into effect. Image source: Candy Crush

Shares of King Digital Entertainment (NYSE:KING), the newly public app-maker behind the popular puzzle game Candy Crush Saga, took a big hit today as a result of recent regulations that will likely make revenue harder to come by. Companies like Apple and Google are removing so-called "freemium" games -- which are free to download but offer tons of in-app purchases -- from the "free apps" section of their respective app stores in Europe, due to regulatory pressure. King Digital Entertainment stock lost 5.6% today, which also saw Bank of America downgrade the shares from buy to neutral.

On a lighter note, shares of job placement service Robert Half International (NYSE:RHI) surged 7.3% Wednesday. Citing an improving labor market, the company's revenue rose nearly 10% last quarter, while net income soared 19%. Both figures topped expectations. The labor market is improving steadily, which should be great business for Robert Half if the trend continues. The economy added 288,000 jobs last month, as the unemployment rate fell to 6.1% in June, its lowest reading since September 2008.

John Divine owns shares of Apple and Google (C shares). You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Apple, Bank of America, Google (A and C shares), McDonald's, and Robert Half International and owns shares of Apple, Bank of America, and Google (A and C shares). 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.

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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