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 rebounded from Wednesday's slump today, as fourth-quarter GDP growth, and impressive corporate earnings, drove markets higher. The U.S. economy grew at a 3.2% annualized clip in the final three months of 2013, showing its resiliency in the face of October's 15-day government shutdown. All 10 market sectors advanced Thursday, led by health care, consumer services, and technology companies. The S&P 500 Index (SNPINDEX:^GSPC), fresh off an 18-point loss yesterday, added just under 20 points, or 1.1%, to end at 1,794 today.
Interestingly enough, the services and technology sectors also produced three of the day's biggest decliners Thursday. Shares of cloud computing solutions company Citrix Systems (NASDAQ:CTXS), for instance, plunged 7.5% as investors expressed their disappointment with the company's forward guidance. Citrix Systems' execution last quarter was great, and the $1.04 earnings per share number came in well ahead of the $0.98 per share that analysts were looking for. But 2014's earnings and sales outlooks were both well below forecasts, and that alone was enough to spur an investor exodus today. It didn't help that at least two investment banks promptly downgraded the stock in response to the news.
Security software provider Symantec (NASDAQ:NLOK) also felt the wrath of Mr. Market, even though it handily beat analyst forecasts in its last fiscal quarter. Symantec stock, shedding 7.3% in trading, also took a beating due to what analysts perceived as subpar forward guidance. I don't always agree with Wall Street analysts -- I believe they aren't well-incentivized to provide accurate predictions -- but I think the fact that Symantec's forward-looking revenue missed estimates is concerning. After all, the company's security software (e.g. Norton anti-virus) is awfully PC-centric, and PC sales are on what I believe to be an irreversible decline. While I still recommend protecting your PC, ridding yourself of PC-reliant investments will protect your portfolio.
Finally, shares of Best Buy (NYSE:BBY) tumbled 5.2% Thursday, as the electronics retailer trimmed its headcount by 950 workers. The job cuts, which all came from Best Buy's Canadian stores, don't reflect the decision to close any locations, and the company currently plans to keep its 265 Canadian stores open for business, according to a Bloomberg report. While reducing labor costs should help pad the company's bottom line, declining sales during the holiday season pose a far graver threat to Best Buy's long-term growth prospects. If the company can aggressively position itself as an e-commerce leader, then it may redeem itself; but until that trend becomes apparent, I'm skeptical about its potential.