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 week loaded with key economic data points, the markets fared rather well. Although the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 both lost ground this week, the Nasdaq increased, and the economic picture here in the U.S. is better than it was before the week's trading sessions began. Over the past five days the Dow Jones lost 66 points or 0.41%, while the S&P 500 shed 0.72 points or 0.04%. But the technology-heavy Nasdaq increased by 2.63, points or 0.6%.
The key data points last week included the retail shopping numbers from the Black Friday weekend, which indicated that while more shoppers hit the streets, they were spending less money. Then on Wednesday, the ADP jobs number came out, showing that the private sector gained 215,000 new jobs in November, compared with a forecast of 173,000. That same day, the Institute for Supply Management's index fell from a reading of 55.4 to 53.9.
Thursday we had a revision to the gross domestic product number for the third quarter, up from 2.8% to 3.6%. And finally on Friday, investors were hit with the University of Michigan preliminary consumer confidence reading for December, which came in at 82.5, up from 75.1 in November. The Labor Department's November jobs report, also coming on on Friday, indicated that the economy added 203,000 jobs last month and the unemployment rate fell from 7.2% to 7%.
Speaking of winners last week, let's take a moment to look at the Dow's top stock of the week, Intel (NASDAQ:INTC). The chip manufacturer saw its shares rise 4.11%, with most of the move coming on Friday, when Citigroup upgraded its rating from "neutral" to "buy." The analysts' reason behind the upgrade was a forecast that PC demand would level out in 2014, as opposed to a continual decline that both management at Intel and research firm IDC are predicting. Since Intel has given guidance based on the belief that PC sales will fall in 2014, Citigroup is making a buy call based on the idea that if computer demand is greater than expected, the stock price will increase next year, making the stock a buy at today's price.
Last week's big losers
JPMorgan Chase (NYSE:JPM) lost 2.02% last week, making it the second worst performing Dow stock during that time frame. The majority of the decline came on Thursday, the day after the bank had already found out about the 80 million euro fine the European Union was hitting the bank with for its alleged participation in manipulating key interest rates. The bank also found out at that time that it had been the victim of a cyber-attack the night before. JPMorgan warned almost half a million customers that their personal information may have been compromised pertaining to UCard prepaid-card users -- a market that constantly seems to be growing and thus more appealing to hackers. This doesn't seem as if it will be a major problem for the bank, but this type of attack is a risk investors may not have been aware of before and should consider before owning a financial service company.
This past week's worst-performing Dow component was 3M (NYSE:MMM), which fell 3.67%. The big decline came on Monday, when shares fell 4.4% after an analyst at Morgan Stanley downgraded the stock from a rating of "equal weight" to "underweight." The basis for the rating change is that 3M's share price appreciation this year -- up 38.51% year to date -- has come from multiple expansion, not increasing earnings. Analyst Nigel Coe thinks shares will lag the market in the future and so thinks you should get out now. But as my colleague John Divine pointed out on Monday, "there is nothing wrong with owning an industry leader paying a solid dividend for the long run." I couldn't agree more, John.
AT&T (NYSE:T) ended last week as the third worst Dow component, after the stock lost 1.93% during the five previous trading sessions. Some of that decline came on Wednesday, when JPMorgan Chase downgraded shares from "overweight" to "neutral" and set a $38 price target. The analyst made the change believing that domestic competition remains aggressive and the possibility of a large merger or acquisition still remains just over the horizon, which could cause some problems for AT&T if it isn't involved.
The other Dow losers this week:
- Chevron, down 0.12%
- DuPont, down 0.06%
- Goldman Sachs, down 1.02%
- Home Depot, down 1.02%
- IBM, down 1.11%
- Johnson & Johnson, down 0.23%
- McDonald's, down 0.58%
- Merck, down 0.88%
- Pfizer, down 0.59%
- Travelers, down 1.9%
- UnitedHealth Group, down 1.31%
- Verizon, down 0.28%
- Visa, down 0.78%
- Wal-Mart, down 1.32%
Fool contributor Matt Thalman owns shares of Home Depot, JPMorgan Chase, Intel, and Johnson & Johnson. Check back Monday through Friday as Matt explains what causing the big market movers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513.
The Motley Fool recommends 3M, Chevron, Goldman Sachs, Home Depot, Intel, Johnson & Johnson, McDonald's, UnitedHealth Group, and Visa and owns shares of Intel, IBM, Johnson & Johnson, JPMorgan Chase, McDonald's, and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.