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 U.S. markets all ended today's session in the black. The Dow Jones Industrial Average (^DJI 0.69%) rose 28 points, or 0.18%, and now sits at 15,399, while the S&P 500 increased by 0.65%, and set a new all-time record high at 1,744. But the Nasdaq was the big winner of the day as it rose 1.32%, and is at a 13-year high, at 3,914.
Today was a great example of how the markets are supposed to work. This is opposed to what we had been experiencing when stocks rose and fell depending on what the politicians in Washington were saying, or whether people believed the Federal Reserve would begin tapering. No, none of that today. Today it was just plain old earnings which moved the markets, the way it should be. To read about the earnings reports of General Electric, click here; for Google and AMD, click here.
Shares of Disney (DIS 1.54%) rose 1.1% today after rumors that management is thinking about selling its ABC stations were put to rest by inside sources. Last night, a report by the New York Post indicated that Disney was looking to sell its eight owned-and-operated ABC stations, which reach about 23% of American households, because they are in large market areas. While this is not a great revenue driver for the company -- third quarter 2013 revenue of $1.5 billion was flat when compared to last year -- this is another nice little business that Disney can use and leverage to promote other units within its family. And that's what Disney is really all about. The company makes a great movie, so that it can then make money on merchandising, attract people to the parks with a themed ride, and then build a brand and relationship with that one customer who saw one Disney film.
One big loser outside the Dow today was J. C. Penney (JCPN.Q), as shares fell 4.76%%, and ended the session at $7, a mark not seen for 33 years. The move was caused by rumors floating around that a Canadian financing company had denied the retailer credit. This claim was unsubstantiated, but it did its damage. Penney investors seem overly nervous lately; on Tuesday, another rumor indicating that the company was talking to a bankruptcy firm sent shares falling 8.89%. But, considering everything going on with the company lately, it's hard to blame them for being a little skittish. I guess the only question, then, is why are they invested in this company in the first place? If you can't take a little bad news without running for the hills about any company you own, than you probably shouldn't have invested money in that company to start.
On the flip side of J. C. Penney was Chipotle Mexican Grill (CMG 1.07%), which rose higher by 16.1% this afternoon. The move came after the company reported third-quarter earnings in which it missed earnings estimates of $2.78, while posting just $2.66 per share. But, the company did beat revenue of $820.3 million by posting $826.9 million, which was an 18% increase from last year. Additionally, Chipotle had a 6.2% increase in same-store sales, and stated that it will likely increase prices next year to help offset higher food costs, which was the reason given for missing on earnings-per-share estimates. Shares of Chipotle closed at $509.74, but some still believe that the company has room to run as it adds new locations. While I do agree that the future still looks bright for the company, I would have to wait for the inevitable pullback before jumping on board, especially because of today's rally.
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