Not so excellent news for actor Ben Curtis. Today, Dell Computer
After 4% to 5% gains across the board yesterday, the major market indexes were beaten back today, with the Nasdaq losing nearly 4% and the FOOL 50 dropping 2.5%.
In today's Motley Fool Take:
- Economy Reacts to D.C. Sniper
- Quote of Note
- Intel Crashes the Party
- Not Your Grandma's Utility Fund
- Shameless Plug: Get a Discount Broker
- Harley's Hog Heaven
- Discussion Board of the Day: Harley-Davidson
- Quick Takes: Coca-Cola, Capital One Financial, Dynegy , more
- And Finally...
Economy Reacts to D.C. Sniper
Sniper attacks killing nine people and critically wounding two others in the Washington, D.C., metro area are taking a toll both on our psyches and the economy.
Fallout from the attacks has had a ripple effect on the Mid-Atlantic region, beginning with lower sales at suburban gas stations and retail stores and carrying through to tourism and agriculture. According to The Washington Post, stores in Montgomery County, Md., report a 50% drop in sales. Tour companies report scores of groups have canceled trips to Washington. Pennsylvania-based Martz Group, which runs tours in the District, said its Cheverly office lost an estimated $100,000 worth of business in the past two weeks.
"It's one of the busiest times of year for the tourism industry in the D.C. area," William A. Hanbury, president and chief executive of the Washington Convention and Tourism Corp., told The Washington Post. "And as we go forward, if he's not caught, this will have more of an impact."
Farmers return home with unsold pumpkins, less than two weeks before Halloween. Giant Foods reports a jump in grocery deliveries. Michaels
Guess who's benefited? The media. From Oct. 2 through Oct. 13, cable news channel ratings saw double-digit increases from last month, according to the New York Post. CNN's audience grew 14%, and MSNBC's jumped 21%.
Ex-military sniper? Al Qaeda? Home-grown serial killer? No one knows. But for now, and probably until the killer's caught, local residents will be doing their shopping from home.
Normally, we say hunker down during difficult economic times, because they're usually short term. Even take advantage of them, if you can. But this is different. We share the fear and anger on a daily basis, every time we see a white van or pump gas in the Fool's neighborhood, Alexandria, Va. Be safe.
You must've RSVP'd for the Party Pooper Ball on accident. Heck, no one even invited Motorola
"Hey, do we want to invite Motorola?"
"No way, dude. You don't want that kind of gloom and doom infecting our rally fest."
But, sure enough, it shows up, carrying the bundt cake of profitability.
Now Intel says it's expecting no more than 6% in sequential revenue improvement from the third-quarter's $6.5 billion showing. In short, there's no way the fourth quarter will come close to the $6.98 billion posted in last year's final fiscal period. You've got more misses than a sorority house, Intel!
That just hurts, bud. Weren't we friends? And what's this about cutting your capital spending budget? Hungry industry mouths were banking on that trickle down. Does Applied Materials
Let's just call this party off and send everybody home. We asked you to bring the chips, and instead you brought the dip.
"Courage is not the absence of fear, but rather the judgment that something else is more important than fear." -- Ambrose Redmoon (1933-1996), writer and rock band manager
Conventional wisdom has long held that the risk-averse and income-seekers, such as your grandma (or you!), should plop their pfennigs into utility stocks and utility mutual funds. Conventional wisdom has changed.
The utility industry used to be a fairly sleepy one. Its companies were heavily regulated and tended to sport stable income streams that paid out regular (and often hefty) dividends. In recent years, though, things are different. The industry is more dynamic, less regulated, and riskier (think Enron). As companies jockey for competitive advantage and aim to grow, their focus is no longer steady maintenance or reliable dividend payments.
An article in The Houston Chronicle explains that since deregulation began in the '90s:
Many telephone and electric companies lost their monopolies, and branched out into riskier ventures, such as electricity trading and high-speed Internet access. In the process, many took on debt and trimmed dividends.... So far this year, [utility] funds lost an average of 29.2%, according to fund-tracker Lipper. Over three years, utilities funds averaged a loss of 12%... Total assets in utilities funds through August dropped to $13.7 billion, down from $20.4 billion at the end of 2001.
This change in the utility landscape has got some mutual fund companies concerned, partly due to the poor performance of their funds focused on utilities. Take Vanguard, for example, which happens to be the country's No. 2 fund company. It's planning to transform its "Vanguard Utilities Income Fund" to the "Vanguard Dividend Growth Fund," giving the renamed entity a much broader scope and a better chance of serving investors well by seeking the most solid and promising dividend-paying investments -- both within and outside the utility industry. Strong Funds did the same thing last year (while also increasing its management fee for the renamed fund).
The bottom line is not that everyone should now avoid utilities. Instead, understand the new environment and have realistic expectations. For some of us, there should still be a place in our portfolios for utilities. As this USA Todayarticle points out, "... the juicy dividend yields that utilities offer are probably the best argument for utilities now." As always, learn more before taking action.
If you want to buy stocks, you need a broker. And who wouldn't want to own stocks? There is no place over the past 100 years where your long-term savings would have fared better than the stock market -- not in bonds, not in real estate, not in gold, and certainly not in Beanie Babies. Our Discount Broker Center makes it super-easy to pick the right broker for you, so check it out!
You've got to hand it to Harley-Davidson
Sure, Harley's always left analysts in the dust: It topped projections each of the last five quarters. But this time, it really smoked 'em.
With consensus estimates pegged at $0.46 a share, Harley saw its bottom line grow by 46% to hit earnings of $0.54 a share. Revenue growth strapped on its helmet and went along for the ride -- soaring 32% to $1.1 billion.
With General Motors
Harley is an icon. It's a legend. The Ford Mustang? Not anymore.
Harley never lost its edge. While most fans of alternative music will bad-mouth a band when it achieves mainstream commercial success, it's still cool to make an annual trek to Sturgis, or to get decked out in Harley gear and accessories, no matter how popular Harley gets. The centennial merchandise is a hot seller, as apparel and collectibles rose by a smart 88% during the quarter.
So Harley revs on. It plans to produce 289,000 motorcycles next year and will churn out 263,000 units this year. As long as demand holds up (and it always seems to when it comes to Harley), it should be an open road for the Milwaukee-based icon.
But maybe the stock is due for a breather. After all, while centennial goodies fly out the door, there's not much marketing power in anniversary 101. This isn't necessarily a bad thing. Even the most impressive of rides has to stop and refuel sometimes.
Be honest. Haven't you always wanted a Harley? Look at you, now. Blushing and shaking your head. But what about Harley stock? Do you need to don a crash helmet to buy into the company as well? All this and more -- in the Harley-Davidson discussion board. Only on Fool.com.
Citing "the severe and continuing downturn in the company's commercial markets, principally commercial aviation," Boeing
In banking earnings news, J.P. Morgan Chase
It's been quite a day at Dynegy
Today on Fool.com: Rex Moore tells investment banks he wouldn't miss analysts a bit.... Like the SEC, Bill Mann wants more info from Schering-Plough.... In Fool's School, is technical analysis useful, and how does it differ from fundamental analysis?... Military members of the Fool Community weigh in on the D.C. shooter.... And the Post of the Day: Cisco Systems.
Bob Bobala, Robert Brokamp, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim