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.
The Dow Jones Industrials (DJINDICES:^DJI) opened Monday consolidating its gains from Friday, trading roughly unchanged as of 10:45 a.m. EST after its nearly 200-point jump in its previous session. Positive economic news on Chinese exports lent some support from the international front, but for the most part investors seemed to focus on company-specific news and its impact on particular stocks and industries. Caterpillar (NYSE:CAT) was among the biggest gainers in early trading, while McDonald's (NYSE:MCD) and Verizon (NYSE:VZ) lost ground.
Caterpillar's 0.80% gain reflected a combination of positive responses to Friday's U.S. jobs report and China's economic news. Caterpillar's heavy-equipment business relies heavily both on the U.S. and China, with the two key markets together providing a sizable portion of the company's overall revenue. Caterpillar has been conservative in its guidance lately, with falling commodities prices weighing on its mining-equipment segment even as decelerating growth in many parts of the world has pulled back on construction-equipment sales. A stronger U.S. economy that starts creating manufacturing and construction jobs could pull Caterpillar out of its funk and get the stock moving higher again on a more sustainable basis.
For McDonald's, though, economic conditions aren't cooperating. The stock dropped 1.2% this morning after the fast-food giant announced November same-store sales growth of just 0.5% globally, accompanied by a decline of 0.8% in its U.S. market. The challenges of a competitive market have forced McDonald's to respond with a variety of menu additions, but a varied menu also creates problems in delivering the high-speed service that fast-food customers demand. As controversy builds over raising the minimum wage, McDonald's could soon face a labor crisis to go with its flagging sales.
Verizon fell 0.4% after announcing it would acquire content-delivery specialist EdgeCast Networks for an undisclosed sum. Given the importance of delivering ever-growing streams of content more quickly and efficiently, the purchase makes sense as part of Verizon's overall attempt to provide digital-media solutions to professional enterprise customers, as well as for its own network. The move will also give Verizon thousands of additional customers to serve, including high-profile names like Twitter, Pinterest, and Hulu.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.