Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The Dow Jones Industrial Average (DJINDICES:^DJI) continued the slide that began Monday, falling 48 points, or 0.3%, to end at 15,470 on Wednesday. It's a different feel than last week, when the index rallied to all-time highs going into the weekend. The slump erased nearly 200 points from last Friday's closing levels, as investors reduce their exposure to the blue-chip index, which is up more than 18% this year.
Investors weren't shying away from Microsoft (NASDAQ:MSFT), though, which added 1.5% on news that the Windows 8 tablet just received a major order from Japan. The 30,000-unit order from Meiji Yasuda Life Insurance, the largest such deployment in the country so far, could be an important first step to further adoption by Japanese businesses. It's a good sign that Microsoft is still working to strengthen its position in the lucrative tablet market, where its market share rose to 4.5% in the second quarter, up from 1% the year before.
Hewlett-Packard (NYSE:HPQ) joined Microsoft atop the Dow today with 1% gains of its own. The stock's price target was boosted to $29 by JPMorgan, which cited a broader mix of revenue at HP. That's precisely what HP needs, since the PC industry itself is in a nasty global slump. CEO Meg Whitman has emphasized the need to expand into areas with more promising futures such as enterprise solutions. The jury's still out, but if the transition goes smoothly, HP investors should continue to see big gains.
Switching gears, let's not forget that two out of three Dow stocks fell today. Alcoa (NYSE:AA) was one of them, dropping 1.1%. There wasn't any big news from the aluminum giant, but there were several market forces at play working to Alcoa's disadvantage. The stock went ex-dividend Wednesday, so shareholders could still sell the stock and keep their right to the next $0.03, or 0.4%, quarterly dividend payment. On top of that, Alcoa is literally the most loathed stock in the Dow, as nearly 10% of the outstanding shares are being shorted.
Lastly, Walt Disney (NYSE:DIS) dropped 1.7%, giving up all of its gains from yesterday plus some. Investors were clearly hopeful before yesterday's earnings announcement, but the third quarter didn't go quite as expected, largely because of subpar box office sales resulting from The Lone Ranger, which was a dud. The good news is that Disney has a ton of valuable assets, ranging from its beloved amusement parks to the right to Star Wars to round-the-clock sports network ESPN.
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