Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
Expect a flat start to the stock market today, as the Dow Jones Industrial Average (^DJI 0.61%) lost an insignificant 11 points in premarket trading this morning. Over the last two days, stocks have erased the big losses from the first week of 2014 and are now back at record levels. Meanwhile, news is breaking this morning on several stocks that could see heavy trading in today's session, including Best Buy (BBY 0.57%), Goldman Sachs (GS 1.78%), and UnitedHealth Group (UNH 0.58%).
Best Buy this morning said intense promotions over the holiday season took a bite out of its profits. The retailer saw overall sales shrink by less than 1%, as it protected and even slightly expanded its market share in some categories for the nine-week period ending on Jan. 5. But there was a hefty cost to that strategy: it will cleave roughly 2 percentage points from profitability for the fourth quarter. Additionally, customer traffic levels fell significantly over the holidays, and the company booked a particularly weak result in the mobile phone business. Best Buy CEO Hubert Joly said the rough holiday results have bolstered management's "sense of urgency" around the retailer's transformation, and he forecast huge cost cuts in the year ahead. The stock is down 28% in premarket trading.
Goldman Sachs today reported fourth-quarter revenue of $8.78 billion and earnings of $4.60 a share. Both figures were solidly higher than Wall Street expected. The company saw broad gains across its business lines, but the investing and lending division stood out with a 20% revenue gain over the full year. Its investment banking business leapt higher by 22% in the fourth quarter as well, helped along by a boost in the volume of initial public offerings that the company managed. Goldman Sachs' stock is up 0.8% in premarket trading.
Finally, UnitedHealth today posted $31.1 billion in sales for the fourth quarter, in addition to a healthy profit of $1.41 a share. Both figures were slightly ahead of analysts' estimates. The health care giant's Optum health services business was a key contributor, growing by 35% to reach quarterly revenue of $10.2 billion. Earnings from that business helped UnitedHealth expand its overall profitability to 6.2% for the year, up slightly from 6.1% in 2012. The company also affirmed its guidance for 2014, saying revenue should come in at about $129 billion and net earnings will be about $5.50 a share. The stock is up 1.2% in premarket trading.
