Investors have been busy this week digesting a rush of earnings reports and economic data, our first indications of the impact of the government shutdown. It appears that businesses are taking the shutdown well, with initial jobless claims falling 10,000 for the last week of October to 340,000. This can be a volatile figure, but it's a small early indication that there weren't a rush of layoffs early in October. What's been more heavily affected is confidence. The Conference Board's consumer confidence index dropped to 71.2 in October from 80.2 a month ago, an initial sign that consumers may pull back spending during the holiday season.
When it was all said and done, strong earnings overshadowed falling confidence and the Dow Jones Industrial Average (^DJI +0.10%) rose 0.29% for the week, helped by some of the index's most well known companies.
AT&T (T +0.43%) gained the most on the Dow this week, climbing 3%. The big news was reports that AT&T is preparing a takeover of Vodafone, the company that just sold its 45% stake in Verizon Wireless to Verizon. The acquisition would give AT&T a huge reach in Europe, India, and the Middle East and more than 500 million subscribers. It would also be the first true global wireless company. There are no formal discussions, and even reports say that an acquisition wouldn't happen until next year, but this is an interesting strategic move for AT&T, if management can pull it off.
McDonald's (MCD 0.11%) was up 2.6% this week, and the biggest news was a split from ketchup maker Heinz. Former Burger King CEO Bernardo Hees was installed as Heinz CEO, and since he still serves on the competitor's board McDonald's decided to find a new supplier. This isn't a huge loss for McDonald's, and most of the company's restaurants in the U.S. don't even carry Heinz. What investors should be more focused on this week is the stock's 3.4% dividend yield in a company with stable sales and a global reach. That's the kind of value I can get behind anytime.
General Electric (GE 0.66%) rounds out the top three this week, rising 2.6%. The company introduced its 3.2-103 brilliant wind turbine, aimed at the U.K. and Ireland markets, where wind energy is cost competitive. The company also signed a 22.8 MW deal with Toto Costruzioni to build a wind farm in Italy. Wind generation isn't a huge business for General Electric, but it is a potential growth engine, so progress on this front shouldn't be ignored. It doesn't hurt that General Electric's stock also sports a 2.9% dividend yield, which seems to be on the top of investors' wish list this week.
