This Is the Reason the S&P 500 Gobbled Its Way to Slight Gains


I promise, no mention of the fiscal cliff today! Cross my heart and hope to go into a tryptophan-induced coma!

With Thanksgiving feasts soon being prepared in countless kitchens across America, and trading volume extremely light, all attention was turned to the temporary cease-fire announced between Israel and Hamas in the Gaza Strip. Hope, even in the slightest, that this peace will be lasting sent the broad-based S&P 500 (INDEX: ^GSPC) higher by 3.22 points (0.23%) to 1,391.03.

Medical-device companies are making waves in the S&P 500 with St. Jude Medical (NYS: STJ) leading the charge lower by 12%, and its peer Boston Scientific (NYS: BSX) heading higher by 5%. Earlier today, the Food and Drug Administration released a report that claims St. Jude's lead that connects a defibrillator to the heart, known as Durata, was inadequately verified through testing. Having suffered through a recall on a previous version of this lead, known as Riata, St. Jude shareholders are experiencing a case of deja vu. Boston Scientific, on the other hand, is enjoying every minute, as it could give the lead manufacturer a chance to recapture market share.

Cloud-based software provider (NYS: CRM) was the index's biggest winner, rising nearly 9%, after squeaking past Wall Street's third-quarter earnings projections. For the quarter, Salesforce earned an adjusted $0.33, $0.01 higher than the consensus estimate, as revenue rose 35% to $788.4 million. Keep in mind, though, that expenses are beginning to rise just as rapidly as, if not faster than, revenue growth. Valued at a frothy 80 times forward earnings and with its growth rate likely to slow, I see no reason investors should be paying such a premium for this cloud-based software company.

On the downside, Best Buy (NYS: BBY) shares continued their slide, down another 3%, just a day after reporting an adjusted profit that widely missed analysts' expectations as same-store sales declined 4.3%. To make matters worse, ratings agency Fitch downgraded Best Buy's debt rating to BB- from BB+ and placed an outlook of "negative" on the big-box retailer as it sees the company's attempt to retain its current market share as utopian at best. CEO Hubert Joly has the next three months to prove shareholders wrong -- otherwise, it could be lights out for another big box retailer.

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Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of St. Jude Medical,, and Best Buy and has created a synthetic short position on Motley Fool newsletter services have recommended buying shares of Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

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