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.
Wall Street often buys the rumor and sells the news, and that's exactly what it did today on the day of the Federal Reserve's policy meeting. The market, already in the throes of a bull run, had been trending higher in anticipation of today's meeting. And for such a big event, it was somewhat of a non-event, really, with the Fed's decision to keep the $85 billion monthly stimulus as is. The Dow Jones Industrial Average (^DJI -0.98%), having surged 111 points yesterday, was unimpressed, losing 61 points, or 0.4%, to end at 15,618.
Home Depot (HD -0.31%), for a second consecutive day, was one of the Dow's better performers, adding 0.5% on a day in which five out of six blue-chip stocks lost ground. Less than a 1% increase certainly doesn't constitute a major mover, and shareholders should be more focused on the company's long-term potential than short-term, minuscule fluctuations. With the well-being of interest rates hanging in the balance, Home Depot investors always keep a close eye on Fed meetings, but the next date to circle on the calendar is November 19, the date of the company's next earnings report.
A retailer of a different sort was on the other, extreme side of things Wednesday: Sears (SHLDQ) shed 5.5%, a day after roaring 11.8% higher after publicly pitching the idea of a spinoff for its Lands' End brand yesterday. With the department store plainly struggling to think up new ways to generate cash, some investors were understandably less enthused today. The Wall Street Journal's cynical piece examining the other two times Sears spun off units in recent years didn't help matters, either.
While Sears probably doesn't envy J.C. Penney (JCPN.Q), per se, it'd be tough for shareholders not to at least salivate at J.C. Penney's 3% jump today. While its stock has posted some nice gains in the past week, you may want to think twice before jumping into this investment thinking it's already bottomed out. Shares are still quite a risky purchase, even after CEO Myron Ullman's upbeat commentary on sales earlier this week. Hopefully, the stock can start making some money again in 2014, but I'll need to see a few more quarters of solid improvement before taking a flier on J.C. Penney.
