Six Stocks That Oddly Dominated The Market Friday

January 17, 2014 by Jon C. Ogg

The stock markets were mixed most of the trading day on Friday. A gain in the Dow Jones Industrial Average was masked because the gains were tied to only two of the thirty DJIA stocks. To prove a point 9with unofficial closing prices for the DJIA and S&), the DJIA gain of 33 points was against a drop of 7.40 to 1,838.49 on the S&P 500 Index. The NASDAQ’s unofficial close was down 21 points to 4,197.58.

The good news on the jobs front is that there are now some 4 million job openings. Again, Friday would have been a far worse looking day had it not been for two DJIA stocks. This felt more like a market of different stocks rather than a stock market.

American Express Co. (NYSE: AXP) was the big winner. The company’s earnings report showed that the wealthier accounts are still spending enough to keep the gravy train rolling. Shares hit an all-time high of $93.62 on the trading day, and shares were up 3.6% at $90.90 right before the closing bell. Apparently doubling earnings is well received still, even at highs.

Visa Inc. (NYSE: V) was the big DJIA gainer, and it being the largest DJIA stock by weighting made all the difference in the world. Its stock was up 4.1% at $231.00 in the final minutes before the closing bell. The gains of AmEx were the big driving force here, and Visa’s nearly 9% weighting in the DJIA makes it three times more dominant than the average DJIA stock.

Elsewhere, things were not looking so hot. Earnings are being met with profit taking, and the drop in shares may even start to give new buyers some incentive to want to bargain hunt next week.

Intel Corporation (NASDAQ: INTC) released earnings that looked fine on the surface on Thursday, but the flat revenue outlook for 2014 did not entice buyers when the stock was close to 52-week highs. Even news that the PC market is stabilizing did not move the needle much here. Intel shares were down 2.6% at $25.84 right before the close, but that was up about 1% from its real lows of the day. Intel was a drag on most other chip stocks. Headlines came out late in the day that Intel was looking at 5% workforce reductions in 2014.

General Electric Co. (NYSE: GE) was the other earnings drop, and the restructuring impact is a remaining overhang. Earnings were fine on the surface, but a lack of revenue growth remains a huge overhang. Then the coming spin-out of the US consumer finance operation is a continued threat. The real issue here is that investors were lightening up after big gains in 2013. GE shares were down 2.6% at $26.50 shortly before the closing bell. GE is now down 6% from its 52-week high of $28.10.

Microsoft Corp. (NASDAQ: MSFT) was down 1.5% at $36.35 in the final minutes of the day, but that is just an Intel sympathy trade. Still, its stock is now down 7% from its 52-week high. If Intel is laying off 5% of its workers, maybe the concern is that that stabilizing PC market is not so stable after all. That cannot be too good for Windows sales.

Nike Inc. (NYSE: NKE) was a dud on Friday, but not on earnings. The relatively new DJIA stock was down 1.8% at $73.42 right before the closing bell. Nike is now down 8.5% from its 52-week high and all-time high of $80.26. Macquarie decided to start coverage with only a Neutral rating with an $80 price target, which did not imply enough upside to entice investors based upon yesterday’s closing price.