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 major indexes all managed to close a down week higher today, with the help of a few big winners, and despite a poor housing report. The Dow Jones Industrial Average (^DJI 0.40%) closed the day higher by 46 points, or 0.31%, and now sits at 15,010. The S&P 500 rose 0.39%, and the Nasdaq increased by 0.52%.
The drag on stocks today was the report that July housing sales came in at 394,000, after economists were expecting 485,000 and June's initial reading hit 497,000. While the July figure looks terrible in comparison, it helped a little bit that June's number was revised lower to 455,000. But it was still a major disappointment to investors.
The good news was that a few of the Dow's components made some substantial moves higher today. First up, shares of Microsoft (MSFT 1.82%) went crazy today, rising 7.29% after news broke that CEO Steve Ballmer plans to retire within the next 12 months. Despite being with the company for nearly 30 years and holding the top spot since the turn of the century, today's move clearly indicates that investors are ready to see Ballmer go. Microsoft was at the top of its game when he took over, and the stock's performance since he took over has been anything but stellar. For current investors, the change at the top could be a great thing, if the company brings in the right person with the right vision. Just because Ballmer may be heading out the door, Microsoft is in no way out of the woods.
Both of the Dow's telecommunications companies also performed really well today. Shares of AT&T (T 1.02%) rose 1.39%, while Verizon (VZ 1.17%) moved 1.25% higher.
AT&T shareholders cheered after MacRumors said the wireless service provider will offer refurbished iPhone 3GS devices for its prepaid GoPhone plans. This move could help the company grow its GoPhone customer base by offering a good product at a very reasonable price. The telecommunications providers are battling for market share, and any advantage one company can get over the rest will make a big impact.
As for Verizon, Moody's Investors Service said today it would cost the company $3 billion to move into the Canadian market and therefore it wouldn't be able to push down prices for consumers in the country. For a company with a market capitalization of $136 billion, a $3 billion investment should be a no-brainer. While Canadian consumers may disagree, it should actually be good news for Verizon investors that if the company did move into Canada, prices wouldn't fall. The last thing Verizon wants to do is spend money to enter a market and then get into pricing wars with the locals.
