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.
Stocks gave back a few points today as the day's major piece of business news came after markets closed, when the Senate confirmed Janet Yellen to serve as the next chairwoman of the Federal Reserve with a vote of 56-26. Yellen will take over the Fed at a key point in the institution's history, as it eases away from a stimulus program that involved bond purchases of up to $85 billion a month. Yellen, who will take office Feb. 1, is considered particularly dovish on monetary policy and is likely to stick with current Chairman Ben Bernanke's goal of lowering the unemployment rate to 6.5% while keeping inflation under 2.5%. Though her confirmation was widely expected, stocks could see a bump from her approval tomorrow, as investors have cheered the quantitative easing program laid out under Bernanke.
Elsewhere in today's macroeconomic news, the Institute of Supply Management delivered the day's only significant economic report, saying its Services index hit 53.0 in December. That was enough for a modest expansion, but below estimates at 54.6 and down from November's total of 53.9. The report may have been the main reason the Dow Jones Industrial Average (DJINDICES:^DJI) slid 45 points, or 0.3%.
Shares of Pandora Media (NYSE:P) were flying higher today, gaining 14% to reach an all-time high on two separate news items. First, the company showed off strong December audience metrics, saying listener hours grew 13% from the year before, and active listeners also jumped 13% to 76.2 million, a new record. The solid growth helped convince investors that Apple's iTunes Radio, which was unveiled in September, did not take significant listenership from Pandora. Separately, the online radio leader announced a new advertising program for automotive platforms. Chief Marketing Officer Simon Fleming-Wood said: "Nearly half of all radio listening takes place in the car. We knew early on that to redefine radio, we would need to seamlessly deliver Pandora through in-dash entertainment systems." So far, only 4 million users have activated Pandora through the dashboard, but that number should grow sharply as Pandora-ready vehicles cycle through the market.
The rollout of the auto-advertising platform also puts pressure on rival Sirius XM Radio (NASDAQ:SIRI), whose bread and butter is the car dashboard. The satellite radio provider, however, got a jolt of its own today, gaining 7.3% on a buyout offer from Liberty Media (NASDAQ:FWONA). On Friday after hours, the media company proposed to buy the Sirius shares it doesn't already own for 0.076 of a new share of Liberty common stock, which would value Sirius XM at $3.68 a share, below today's closing price of $3.83. Sirius shares continued to climb after hours today, as the company appeared set to demand a bigger premium from Liberty. Liberty already owns 52% of Sirius XM but is seeking full control to give it additional cash flow to land Time Warner Cable. Liberty CEO John Malone's already lifted Sirius stock in 2013, when he set out to gain majority control of the company, and he seems likely to do so again, as his long-standing attentions for Sirius seem to indicate that he would be willing to raise his bid.