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 S&P 500 Index (^GSPC 0.45%), though trading more or less sideways throughout the day, managed to end in the black Monday, stringing together a fourth straight day of gains. With Wall Street looking ahead to the thick of earnings season and the debt ceiling/shutdown crisis temporarily behind us, the benchmark index added 0.2 points, or less than 0.1%, to end at 1,744, an all-time record close. From where I sit, it's hard to imagine how corporate America could possibly be healthier after a 16-day government shutdown than it was before, but earnings season should give us a better idea about how justified current market levels are.
One S&P 500 stock that wasn't rewriting history books was J.C. Penney (JCPN.Q), which continued its recent death spiral, losing 8.3% on Monday. Actually, there was something historical about J.C. Penney shares today: They ended yet again at lows not seen in over 30 years. While there may be a flip side to every coin, the proverbial J.C. Penney specie is defaced on both sides and in danger of being recalled from circulation altogether. It's quite possible that talks of bankruptcy and $1-per-share price targets are overblown, but the famous Wall Street admonition warning investors against trying to catch a falling knife has never been truer than now.
Another iconic American brand, Goodyear Tire & Rubber (GT 0.54%) also saw its shares plummet Monday, as the stock slumped 6.7%. Thankfully, Goodyear's future is in far less jeopardy than J.C. Penney's, but that didn't stop Deutsche Bank from downgrading the stock to "hold" from "buy." While the sun certainly doesn't rise and set with analyst opinions, well-known research outfits do have the ability to move stock prices. In this case, the crystal ball displaying Goodyear's future margins fogged up, but with a strong name brand, consistent earnings potential and a small dividend, this stock is far from doomed.
Lastly, Halliburton (HAL 0.55%) shares slipped 3.5% as the company's third quarter failed to impress investors. Dismissing the fact that the $46 billion oil services giant boosted year-over-year earnings by 24%, global revenue advanced just 5% as competition in North American markets intensified. Halliburton's massive scale, international diversification, and industry experience should reassure long-term investors that today's setback isn't reflective of Halliburton's staying power.
