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.
Friday's horrendous jobs numbers had little bearing on the stock market today, as two stocks advanced for every one that fell, and nine out of the 10 market sectors ended in the green. Just looking at the raw numbers, you might be inclined to invest in equities, too: U.S. nonfarm payrolls added 74,000 jobs in December, and the unemployment rate fell from 7% to 6.7%, the lowest reading since October 2008. But once we've finished doing our jig and throwing our money at stocks, the numbers aren't so impressive upon closer examination.
Payrolls were expected to grow by 120,000 to 225,000, and the unemployment rate only fell because people gave up on job-searching. Dismissing the concerns of the day, the S&P 500 Index (SNPINDEX:^GSPC) added four points, or 0.2%, to end at 1,842.
Alcoa (NYSE:AA), the corporate guinea pig that leads us into earnings season, shed 5.4% Friday after reporting a fourth-quarter loss. It's been a tough couple of days for Alcoa; yesterday, the company settled charges with the SEC and Department of Justice, which alleged that a subsidiary of the company illegally paid powerful foreign officials with influence over aluminum contracts. Alcoa will legally pay $384 million to various incarnations of Uncle Sam to settle the charges.
Data warehousing company Teradata (NYSE:TDC) saw its stock slip 2.4% as a lack of investor confidence continues to stifle the share price. Teradata stock dipped below $40 in December, reaching three-year lows after RBC downgraded shares to a sector perform. While its performance in the last several years isn't anything to write home about, the company's still perfectly functional and profitable; and, by the way, data storage isn't going the way of the Edsel anytime soon. There will be constant demand for Teradata's services for the foreseeable future, so the only question is whether the stock is too richly valued at current levels. Teradata's valuation today doesn't look like a screaming buy, but it's not a stock that comes to mind when I think of bubbles, either.
Lastly, money transfer giant Western Union (NYSE:WU) fell 1.7%, as investors transferred their shares for money. The company has an enviable and well-known network of locations across the globe where customers can send and receive payments. On top of its consumer-to-consumer offerings, Western Union can do things like manage recurring bills (consumer-to-business), and facilitate international, cross-currency transactions for businesses (business solutions). While the stock pays a healthy dividend, the company is loaded up with debt, and with online and mobile payment solutions (via smartphones, tablets, and other devices) becoming ever-more convenient and widespread, Western Union must struggle quickly to adapt, or suffer the consequences.