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.
As the market opened this morning, the Dow Jones Industrial Average (^DJI +0.02%) was down for the week; but then the blue chip index rallied this afternoon, and closed up 69 points, or 0.45%, and the Dow ended the last week of October in the black by 45 points, or 0.29%. The same is true for the S&P 500, which ended today's session up 5.1 points, or 0.29%, and the week higher by 1.87 points, or 0.1%. The Nasdaq moved higher today by 2.33 points, or 0.06%, but that wasn't enough to dig itself out of the hole it created earlier in the week and, thus, the tech-heavy index finished the week down 21 points, or 0.54%.
One Dow component that contributed to today's winning session was Walt-Disney (DIS 0.68%), which inched higher by 0.61% as talks pertaining to a new contract between Disney and cable provider Dish Network (DISH +0.00%) continue to move sluggishly. This afternoon, Dish's Chairman Charlie Ergen said that his company's relationship with Disney "has not been the best," but that talks will continue until the two sides reach terms that both parties can agree to. Currently, Disney's networks are being offered to Dish customers, although the last contract expired back in September and a new one has yet to be agreed upon. Disney has stated that it has concerns with Dish's commercial-skipping technology, which has been a problem with other broadcasters in recent months. It's likely that a deal will be done sooner or later, and if today's price movement is any indication, investors don't seem to be worried about this.
On the flip side of Disney, shares of fellow Dow component Home Depot (HD 1.61%) headed south today by 1.16%. The move comes as homebuilder DR Horton lost 2.32% today as concerns pertaining to the housing market begin flaring up again. One reason is because interest rates jumped higher today; the five-year U.S. Treasury Bond yield rose from 1.32%, to 1.37%, while the 10 year increased from 2.54%, to 2.62%, and the 30 year jumped from 3.63%, to 3.7%. As we have seen in the recent past, rising interest rates will temporarily put a damper on the housing market, as possible homebuyers are scared away due to the increased cost of financing. But investors should not be looking short term, instead focusing on the long-term health of Home Depot's business as a reason to invest and continue to hold shares.
But, while the short-term future of the housing market may be in question, Republic Services (RSG 0.76%), one company I have noted in the past as a hidden winner of a strong housing market, posted solid earnings today, and shares increased 2.6% based on increased solid-waste volume from commercial, industrial, and residential customers. Revenue in each of the three markets grew by 20% during the quarter as volumes jumped 2.7%. The company also approved a $0.26 per-share dividend (the same amount as the last payment), and increased its buyback authority by $650 million, placing the total buyback fund at $760.6 million through 2015. Investors should be happy with today's report and confident that, while Republic Services isn't the fastest-growing company, it is certainly one that should continue providing income and stability to their portfolios regardless of the country's economic condition.
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