Please ensure Javascript is enabled for purposes of website accessibility

A Fool Looks Back

By Rick Munarriz – Jan 11, 2014 at 3:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Let's take a look at the news that broke this past week.

If we're in an economic recovery, why are so many consumer-facing companies closing stores? We saw more prolific retailers scaling back this week.

Casual-dining laggard Ruby Tuesday (RT) announced plans to close 30 of its restaurants in the next few months. Macy's (M 1.51%) announced that it will let 2,500 employees go as it initiates cost-cutting moves that will also include shuttering five of its department stores.

Ruby Tuesday's a mess. The chain tried to drum up hungry patrons by introducing pretzel-bread burgers and flatbread pizzas at price points between $5.99 and $9.99 this past summer, but that couldn't save the company from another quarter of dreadful quarterly comps. Macy's is in a much better place. It posted positive comps over the holidays, and it's proving that the five closures are normal by also revealing plans to open even more new stores. However, it wouldn't be streamlining its operations to trim $100 million a year from its operating overhead if it was optimistic about the near-term prospects for retail.

This is going to be an interesting year as we weigh the economy's recovery at a time when interest rates and the costs to run a business are inching higher. Let's see if we can avoid too many more of those "everything must go" clearance-sale signs.

Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.

  • Micron Technology (MU -1.13%) was the second biggest winner in the S&P 500 last year, and it's kicking off 2014 on another strong note. The DRAM bellwether moved higher after posting better-than-expected quarterly results.
  • Baidu (BIDU 5.28%) shares soared 77% in 2013, but a JPMorgan Chase analyst thinks China's leading search engine will continue to move higher in 2014. He's slapping a $210 year-end price target on the shares, encouraged by its gains in mobile.
  • Netflix (NASDAQ: NFLX) moved lower after Morgan Stanley downgraded shares of the leading video service, lowering its price target from $330 to $310. Then again, the same analyst had downgraded the stock four months earlier and it's trading 15% higher now. Not every downgrade is fatal.

Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Amazon.com, Baidu, and Netflix and owns shares of Amazon.com, Baidu, JPMorgan Chase, and Netflix. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ruby Tuesday, Inc. Stock Quote
Ruby Tuesday, Inc.
RT
Macy's Stock Quote
Macy's
M
$23.49 (1.51%) $0.35
Micron Technology Stock Quote
Micron Technology
MU
$55.12 (-1.13%) $0.63
Baidu Stock Quote
Baidu
BIDU
$99.64 (5.28%) $5.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
351%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.