Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
Retail sales rose by 0.2% in August, falling short of the expected 0.5% gain. Vehicle sales remained strong and without those included the retail sales rose only 0.1%. On top of that, the Thomson Reuters/University of Michigan Consumer Sentiment Index fell to 76.8 in September. That's well below the 82.1 level of August. Despite the slightly downbeat results, the Dow Jones Industrial Average (^DJI 1.73%) seems determined to finish higher after an already strong week, up 0.46% as of 2:50 P.M. EDT.
Intel (INTC 2.20%) is in the driver's seat of the Dow today, up 3.2% after analysts at Jefferies upgraded the stock from "hold" to "buy." Analyst Mark Lipacis set his new rating because he believes the tech giant is making strides in the mobile and low-end PC markets.
"What was compelling to us [at Intel's developers' conference] was how wholeheartedly Intel seemed to embrace the idea that it needs to dominate the low-end and low-power portion of the market," Lipacis said, according to Morningstar. "All the Intel managers we spoke with conceded that they miscalculated the tablet's success, and unequivocally admitted that tablets indeed were cannibalizing their business."
This is indeed an interesting point in time for Intel, as it has nearly 80% market share in the microprocessor market and has a gigantic budget for capital expenditures, which enables the company to break into additional markets. Intel is continuing to stay aggressive with its plans to introduce new chip architectures every two years in an effort to further extend its lead over competitors. Still, Intel will have to prove to investors that it can adapt as the PC market continues to decline.
Outside the Dow, Ulta Beauty (ULTA 2.17%) is soaring, up 17.6% after its second-quarter earnings report easily beat estimates. Ulta reported a net sales increase of 25% and same-store sales growth of 8.4% during the quarter. Gross margins expanded by 50 basis points, which helped adjusted earnings climb 30%. CEO Mary Dillon had this to say:
The Ulta Beauty team delivered a very strong quarter while moving our growth strategy forward. Ulta Beauty added several new brands to its stores; we further expanded the number of Clinique and Lancome boutiques; we drove rapid growth in our e-commerce business.
Twitter is clamoring to get its piece of the money pie, announcing that it filed to go public. Facebook shares are now trading above their IPO price last year, and LinkedIn shares have soared roughly 150% since the company's 2011 IPO. This appears to be an excellent time for Twitter to jump into the market after FB convinced investors that it can create revenue from mobile users. That's important, considering that Twitter says 200 million users send more than 400 million tweets daily -- 60% of which are sent from mobile devices.
