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ExxonMobil and Procter & Gamble Push the Dow Higher

By Matt Thalman – Feb 14, 2014 at 3:30PM

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Major indexes fight for the black after a better than expected consumer sentiment report.

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.

With 30 minutes left in the trading day, the Dow Jones Industrial Average (^DJI -0.90%) is higher by 134 points, or 0.83%, the S&P 500 is up 0.53%, and the Nasdaq has fought its way into the black and is now up 0.10%. A higher than expected Thomson Reuters/University of Michigan preliminary February consumer sentiment reading of 81.2 is helping push the major indexes higher, but two stocks in particular are assisting the Dow's rise.

Shares of ExxonMobil (XOM -0.84%) and Procter & Gamble (PG -0.26%) are up 2,7% and 2.2%, respectively. Exxon's move higher comes as the company announced that its Damar oil field, which is off the east coast of Malaysia, has started natural gas production. Exxon controls 50% of the project, with Petronas Carigali holding the rest of the stake. Exxon and other major oil and gas companies have been hurt recently by declining production levels around the world. The Damar field has a projected daily production capacity of 200 million cubic feet of gas, which should help stem Exxon's decline.  

Procter & Gamble's move comes after Reuters reported the consumer goods company has launched an informal search for a successor to CEO A.G. Lafley, who first served in Procter & Gamble's top position from 2000-2009 and came out of retirement last year to replace CEO Bob McDonald. From the start Lafley never planned to stay long term. Reuters reported that both internal and external candidates are being considered for the job. Names being thrown around for external candidates are Estee Lauder CEO Fabrizio Freda and Susan Arnold, an operating partner for the Carlyle Group. Internally, Melanie Healey, P&G's group president of North America; David Taylor, P&G's group president of global home care; and Deborah Henretta, the leader of P&G's global beauty care division, have also been mentioned. Procter & Gamble declined to speak about the matter, stating its does not comment on rumors and speculation.  

Outside the Dow, shares of real estate marketplace website Trulia (NYSE: TRLA) and competitor Zillow (ZG 0.27%) are down nearly 18% and 9.6%, respectively. The declines come after Trulia reported earnings last night; the company reported revenue of $49.7 million, a 141% increase from the prior year, compared to analysts' expectations of $49.6 million. Earnings per share came in at $0.03, compared to a $0.03 loss the previous year, but well below the $0.08 gain Wall Street wanted to see. Furthermore, the company is guiding for the current quarter's EBITDA to fall within a range from $1.4 million to $1.6 million, while again Wall Street was predicting earnings before interest, taxes, depreciation, and amortization of $8.49 million.

Trulia's management said the low EBITDA figure is largely due to an $45 million advertising campaign set to start during the first quarter of 2014. This is where the problem for Zillow comes in. The two companies are desperately competing for the same customer base, and while Zillow plans to spend $65 million in the coming year on advertising, Trulia's $45 million will likely make it more difficult for Zillow to capture new customers.  

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Matt Thalman owns shares of Zillow. The Motley Fool recommends Procter & Gamble and Zillow. The Motley Fool owns shares of Zillow. We Fools may not 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.

Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,476.46 (-0.90%) $-305.02
Zillow Group Stock Quote
Zillow Group
ZG
$34.05 (0.27%) $0.09
Exxon Mobil Stock Quote
Exxon Mobil
XOM
$103.54 (-0.84%) $0.88
Procter & Gamble Stock Quote
Procter & Gamble
PG
$150.92 (-0.26%) $0.40

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

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