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.
A booming services sector, and an improving labor market, painted a picture of an American economy that continues to stabilize, an impression that will be made clearer still with tomorrow's nonfarm payroll report. The Labor Department numbers tomorrow carry special weight, because they will play an important role in the Federal Reserve's decision later this month about when to start tapering monthly asset purchases. Although interest rates rose today on the likelihood of the Fed's tapering, Wall Street couldn't ignore signs of a recovery, and the S&P 500 Index (^GSPC 1.67%) added two points, or 0.1%, to end at 1,655.
Newmont Mining (NEM +2.48%) investors didn't partake in the market's gains today, as the stock sank 4.2%. Shares in the gold miner felt the wrath of falling gold prices as the dollar strengthened Thursday; the value of bullion typically rises as the dollar weakens, and, with the monthly stimulus primed for a slowdown, investors hedging against a declining greenback headed for the exits.
Sprint (S +0.00%) shed 2.6% as the telecom sector stumbled Thursday. The sector is in the midst of a swift and massive era of consolidation; Verizon earlier this week reached one of the largest deals in corporate history, spending $130 billion for total control of its eponymous U.S. wireless business, which was partially owned by the British operator Vodafone Group. Now, Sprint and the other telecom heavyweights have to fight -- and pay up -- to defend their business and retain customers. Sprint is now issuing long-term debt to finance future moves, and the company's need for capital is so great that it may be forced to offer creditors unusually high interest rates.
Lastly, Deere (DE 2.50%) shares dropped 2.3% as Morgan Stanley initiated coverage on the equipment company, giving the stock the dreaded "underweight" rating. Analysts reiterated weaker prospects in the future of Deere's agricultural business, as the prices of cash crops, like corn and soybeans, are projected to fall. If Wall Street is noticing the bleaker market for agricultural commodities, farmers are certainly aware of it, too, and may scale back equipment purchases with that in mind. Deere's stock certainly doesn't look frothy at current levels, as investors considering the lack of future growth are paying less than 10 times earnings for shares in the company.
