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.
Lagging effects of the U.S. government's 16-day shutdown are slowly starting to materialize in the form of good old fashioned Wall Street speculation. What that means for investors depends on which side of the value-growth fence they find themselves on. The market certainly isn't making it easy for value investors – Thursday saw stocks advance across the board on bets that central banks across the world will be forced to continue easy money policies. The Dow Jones Industrial Average (DJINDICES:^DJI) spiked 95 points, or 0.6%, to end at 15,509.
While equities may be unapologetically propped up by central-bank policies as opposed to organic, unassisted private-sector growth, stocks remain the only game in town for long-term investors. The services sector outperformed the other nine major market sectors today, and Home Depot (NYSE:HD) shares led the Dow's climb, adding 2.3%. With interest rates unlikely to soar anytime soon, businesses like Home Depot, which are reliant on a stable real estate market, find themselves in enviable positions. The stock also offers investors a 2.1% dividend yield, which is more than you'll get from the U.S. Treasury for seven year T-bills.
Satellite radio mainstay Sirius XM Radio (NASDAQ:SIRI) shed 3.6% Thursday, as third-quarter results failed to excite shareholders. Sirius is still growing, and its decision to leverage its wide user base and pricing power with a modest rate increase next year is the right move. The stock, however, is nearly priced for perfection, trading at 52 times earnings, a multiple hardly justifiable by Sirius' slowing growth rates. That said, perhaps the company's newly announced David Bowie Channel (seriously, it's happening), launching October 30, will reinvigorate the days of rapid growth.
Lastly, shares of US Airways Group (UNKNOWN:LCC.DL) jumped 5.9% Thursday, as prospects for a merger with AMR Corp got a boost from increasing nationwide political support. Commercial air travel is an almost fundamentally oligopolistic industry, with high costs of entry, and constant regulatory scrutiny. Regulatory scrutiny, in fact, is the pesky hindrance to the proposed US Airways-AMR merger. The Justice Department, suing to prevent the merger on antitrust grounds, is getting pushback from politicians across the country who feel the merger would benefit the markets they represent.
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