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What Happened in the Stock Market Today

By Steve Symington – Dec 29, 2017 at 5:01PM

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Wall Street closed 2017 with a whimper, but TiVo and Amazon provided some interesting news for investors on Friday.

The stock market pulled back on the last trading day of 2017, albeit after several quiet sessions of modest gains earlier in the week. It's been a great year for equities overall, despite widespread political strife, as global growth helped bolster commodity prices and corporate profits. All told on Friday, the Dow Jones Industrial Average (^DJI -0.38%) and S&P 500 (^GSPC -1.03%) fell roughly half a percent.

Today's stock market

Index Percentage Change Point Change
Dow (0.48%) (118.29)
S&P 500 (0.52%) (13.95)

Data source: Yahoo! Finance.

Friday's losses were fairly broad; tech stocks were a primary driver, with the Technology Select Sector SPDR Fund (XLK -0.83%) down 0.53%. Oil stocks fared even worse, with the SPDR S&P Oil & Gas Exploration & Production ETF (XOP -0.45%) falling 1.04%.

Among individual stocks making noteworthy moves, TiVo (TIVO) popped on rumors that the digital-video recording company was the subject of acquisition interest, and (AMZN -8.43%) pulled back after the online retail giant inadvertently drew some Twitter fire from President Trump.

Wall Street sign with Exchange sign on a stone wall in background


TiVo the takeout target?

Shares of TiVo soared 11% today after cited anonymous sources stating that the DVR specialist had received multiple buyout bids of just over $20 per share from interested private-equity buyers. TiVo closed on Thursday at $14 per share. 

It's not terribly surprising that private investors might want to make a move now. TiVo shares are down more than 20% for 2017, and sit well below the roughly $18 per share at which they traded when it merged with digital entertainment patent technology company Rovi late last year. Since then, TiVo has instituted a particularly generous dividend policy -- offering a payout that yields roughly 4.6% annually at today's prices -- struck multiple new service agreements with the likes of Altice USA and Liberty Global, and more recently received a significant favorable ITC ruling in a patent infringement case against Comcast.

That said, the sources also noted that TiVo has not yet launched a strategic review process, so it's far from certain that it will entertain a buyout offer. But given the prospect of a juicy acquisition premium, it's hard to blame investors for bidding up TiVo stock.

Amazon in Trump's crosshairs

Meanwhile, shares of fell 1.4% today after President Trump suggested on Twitter that the U.S. Postal Service should charge "much more" to ship packages for the online retail juggernaut.

"Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer?" Trump Tweeted on Friday morning. "Should be charging MUCH MORE!"

This isn't the first time Trump has criticized Amazon. In August, he erroneously argued that Amazon doesn't pay sales taxes, is "doing great damage to tax paying retailers," and has resulted in "many jobs being lost!" And over the past year -- keeping in mind Amazon CEO Jeff Bezos personally owns The Washington Post -- Trump also railed against the "Amazon Washington Post" for allegedly fabricating stories.

It's also unclear what impact pressure from Trump could have on the Postal Service in this regard. Its rates are set by the independent Postal Regulatory Commission. And even if it were allowed to hike its parcel rates, Amazon could either pivot toward other shipping companies like UPS and FedEx, or ramp up its efforts to increase the scale of its own package-delivery service.

In short, it's easy to see why Amazon stock dropped today. But I'm not convinced that Trump's threatening words should be of much concern to longer-term investors.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Twitter. The Motley Fool recommends Comcast, FedEx, and Liberty Global. The Motley Fool has a disclosure policy.

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