Wall Street seems to adjust its sentiment daily based on when it thinks the Federal Reserve will slow its stimulus program. Yesterday, the Dow Jones Industrial Average (DJINDICES:^DJI) gained 60 points, as investors believed that poor industrial production numbers made Fed cutbacks more unlikely.
Alas, the head of San Francisco's Fed Bank himself said, on Thursday, that it may be time to ease stimulus efforts. The Dow promptly fell 42 points, or 0.3%, to end the day at 15,233, as 22 of 30 components ended in the red. But one blue chip was far and away the best stock today.
Double-digit intraday swings don't happen often in the Dow. Cisco Systems (NASDAQ:CSCO), however, surged 12.6% today after crushing estimates. Both revenue and earnings per share beat and, importantly, future sales projections didn't disappoint. The move to increase the dividend by more than 20% not only rewards shareholders, but shows Cisco's confidence in its own future. It's no wonder Dow investors treated Cisco like it was the best stock today.
Hewlett-Packard (NYSE:HPQ) was able to piggyback off of Cisco's success, adding 1.9%. Technology, in general, was up today, ending the day as the only major sector in the black, adding 0.9%. While HP is up about 50% in 2013 already, it's by no means an indication of the company's health or success, especially since the company still relies on a failing PC market.
Wal-Mart (NYSE:WMT) fell 1.7% on unimpressive sales and weak forecasts. Blaming bad numbers on the capriciousness of the weather probably didn't earn any brownie points for management, either, although delayed tax refunds could be a legitimate reason for the subpar quarter.
Lastly, Walt Disney (NYSE:DIS) shed 1.8% to finish at the bottom of the Dow. The decline may have more to do with the consumer services sector, which was the worst-performing segment of the market today, than anything Disney-specific. In fact, news today that Disney-owned ESPN obtained rights to the U.S. Open for 11 years, beginning in 2015, is another win for the media empire. Some estimates put the value of the deal at $770 million, which could have sparked fears of overpayment.
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