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.
Stocks are moving on up today, but the markets delivered a curve ball when Nasdaq halted trading midway through the day due to a computer error, although the Nasdaq Composite (NASDAQINDEX:^IXIC) had been firmly in the green before that. However, the Dow Jones Industrial Average (DJINDICES:^DJI) hasn't missed a beat since then, up 60 points as of 2:25 p.m. EDT. Most stocks are in the green today, but one massive loser is holding the Dow back from far stronger gains: Hewlett-Packard (NYSE:HPQ) has melted down, suffering double-digit percentage losses today. Let's catch up on all the action.
HP's earnings: Really that bad?
HP reported earnings after yesterday's closing bell, and the reading on this struggling tech firm's turnaround wasn't good. The company did manage to post adjusted quarterly earnings of $0.89 per share, down from $1 a year ago -- and the company even took a big hit to net income in that 2012 quarter. However, sales took a bite out of investors' expectations, as HP's top line dove by 8% year over year to fall slightly short of average analyst projections.
The results were disappointing, but do they really warrant the disastrous 12% slide HP's shares have suffered today? Not likely, but given the stock's rapid run-up in 2013 -- shares have jumped nearly 70% year to date -- HP investors and Wall Street have embraced volatility around this unstable stock. CEO Meg Whitman's turnaround is a long-term plan that requires patience, and she's managing to cut down on the firm's costs even as PC sales continue to slide.
The reality of a turnaround story like HP's is that the firm won't dazzle Wall Street with amazing numbers. HP has been in a slump for a while now, and it will take time for Whitman to reveal the fruits of her labors. Investors who are sticking with this stock should be prepared to wait out the storms of volatility that will likely continue to come.
Fellow tech stock Microsoft (NASDAQ:MSFT) is having a much better day, with shares up about 2.2% to rank among today's top Dow stocks. The company recently released its initial gaming title line-up for its next-generation Xbox One gaming and entertainment console, which it plans to release sometime this holiday season. Microsoft has pulled a 180 with its Xbox One following the initial public outcry that met its unveiling. However, analysts still see the device falling short of expectations -- particularly in light of how rival Sony's (NYSE:SNE) competing PlayStation 4, due out this November, is faring.
According to Sony, the PlayStation 4 has already racked up 1 million pre-orders and has a strong title line-up of its own planned for this fall. Microsoft may have shed the initial criticism of the Xbox One after reversing some of its more controversial plans, but it still has some catching up to do.