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.
For a third day in a row, the Dow briefly rose above 16,000, but for the third day in a row, the stock market couldn't hold its gains. Today, the release of minutes from the latest Federal Reserve meeting raised more questions than they answered, leading many to doubt how much longer the Fed will keep pumping more liquidity into the bond market. Despite the downdraft, J.C. Penney (NYSE:JCP), Zynga (NASDAQ:ZNGA), and Herbalife (NYSE:HLF) all posted solid gains today. Let's take a closer look to see what inspired these stocks to climb Tuesday.
J.C. Penney gained more than 8% after its earnings report showed signs of a potential turnaround taking shape for the beleaguered retailer. The results themselves were ugly, as same-store sales fell 4.8%, leading to an even wider loss than investors had already braced themselves to see. But with positive same-store sales in October and the increasing sense that a bankruptcy filing is not in the company's imminent future, J.C. Penney's stock continued its huge bounce that has send share prices up by half in just a month's time.
Zynga rose 7%, hitting its highest levels in more than a year. Yesterday, the company won a jury verdict in a federal court in Texas, finding that Zynga had not infringed on the patents of Personalized Media Communications in its Farmville, Words With Friends, and other game titles. With $25 million in royalties at stake, the decision is meaningful for Zynga not just in itself but in potentially deterring similar suits from other competitors.
Herbalife climbed more than 6% as another high-profile investor got involved in the ongoing fight between the bullish Carl Icahn and the bearish Bill Ackman. Bill Stiritz, who is the CEO of cereal-maker Post Holdings, raised his stake in Herbalife to 6.4%, putting him among the top five shareholders of the company. Stiritz reportedly wants to talk with Herbalife about strategies that could include financing and stock buybacks, and shareholders took that as yet another positive sign that the company will survive the scrutiny it has received ever since Ackman presented his bearish case.