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.
After yesterday's modest rise, the stock market is headed in the opposite direction today, although things are still rather quiet. As of 1 p.m. EST the Dow Jones Industrial Average (DJINDICES:^DJI) is down 48 points, or 0.3%, while the S&P 500 is off by 0.35% and the NASDAQ has lost 0.27%. The only notable news to report pertaining to the market was an interview this morning in which the Dallas Federal Reserve president said the Fed's quantitative-easing programs "cannot go on forever." Because this is hardly news to most investors, some are taking it as a sign that tapering will begin sooner rather than later -- and possibly even in 2013.
A few winners and losers
Shares of Walt-Disney (NYSE:DIS) are down 1% this afternoon, as investors fear the potential backlash the company may feel in China from a skit Jimmy Kimmel performed on Disney-owned TV station ABC. Kimmel had a young boy on his show who said, in an unscripted moment, that the U.S. should solve its debt problems by ending the lives of everyone in China. This has outraged not only Chinese-Americans, but also the Chinese government and media. Chinese foreign ministers have asked for apologies. Furthermore, while the American population is taking its anger out on ABC and Jimmy Kimmel, some fear that the Chinese government and media will focus their attention on ABC's parent; Disney is currently building a new theme park in the country.
Another big mover within the Dow today is Intel (NASDAQ:INTC), which is up 1% despite the fact that MKM Partners downgraded the stock from buy to neutral this morning. The firm has a $25 price target on the stock, which currently trades around $24. The reason given for the downgrade was that MKM doesn't see any catalyst for the company or the stock price in the near term. The market is clearly not paying much attention to this downgrade today, and the average investor shouldn't, either. I have said it before, and I'll say it again: This is merely the opinion of a single firm. Don't get caught up in following analysts' ratings. Focus on what's important: business fundamentals.
And lastly, shares of Johnson & Johnson (NYSE:JNJ) are down 0.9% today after closing yesterday near a 52-week high. The stock is up more than 33% year to date, and as its sets new highs, it's natural for some investors to take money off the table, which is likely what we are seeing today. But in addition to investors cutting back on their positions, some have begun to build short interests in the stock; J&J recently became the 10th-most shorted Dow component. Again, though, these short positions are likely based on the fact that the stock is up big-time this year, considering the company's size and growth metrics; they're probably not a bet that there is a material problem with the company.