These Winners Couldn't Save the Dow Today


One of the problems with a lot of economic data is that it looks backward rather than forward. Today, the Federal Reserve released its Beige Book of economic activity, which highlighted some of the struggles that the economy faced during the last six weeks or so of 2012.

As just about anyone could have predicted, a substantial recovery from Hurricane Sandy helped boost conditions during the holiday season, but fears of the fiscal cliff helped hold back consumer enthusiasm, leading to tough conditions for the holiday-dependent retail industry. Yet now that the fiscal cliff has been resolved -- at least temporarily -- it's hard to draw any useful conclusions about what the Beige Book results mean for the future. Nevertheless, although the broader stock market was largely mixed, the Dow Jones Industrials fell about 24 points.

Still, the dour mood couldn't dampen spirits for the entire market. Within the Dow, Hewlett-Packard soared more than 4% as the company reportedly has gotten several offers to buy parts of its business. Although HP is going through some strategic realignments to try to refocus on more profitable and promising business lines going forward, it's unclear whether HP has any interest in selling big units like its EDS and Autonomy divisions. With the Dell talks apparently still going on, it's natural that other players might want to compete by looking at similar HP businesses.

Beyond the Dow, Cabela's rose 6% after announcing plans to open new stores next year. The sporting-goods retailer has been one of the focal points of gun control controversy following the Sandy Hook school shootings, as gun sales represent an important part of Cabela's business. Yet with an Obama administration proposal largely limiting itself to assault weapons, both Cabela's and gun makers Sturm Ruger and Smith & Wesson saw substantial gains in the 5% to 6% range.

Finally, Rite Aid rose 3% as the drugstore chain benefits from the impact of the worst flu season in more than a decade. Demand for flu shots has now exceeded supplies, and with suppliers scrambling to provide more vaccine, Rite Aid could see continued support from customers flowing into its stores to deal with symptoms.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of Sturm Ruger. Try any of our Foolish newsletter services free for 30 days. 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.

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