Dow Bucks Negative Consumer Data to Finish Strong Week

Dow Bucks Negative Consumer Data to Finish Strong Week

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.

Despite mostly negative economic news coming out today, the Dow Jones Industrial Average rose again to cap off its second-best week of the year, gaining 75 points, or 0.5%. Investors seemed to look past disappointing consumer-level data on consumer confidence and retail sales, with their eye on the Fed meeting next week. Perhaps, as has been a pattern recently, the market sees the week data as an argument against beginning the stimulus taper, or in slowing the initial cut. A majority of analysts expect the Fed to begin the taper next week with a reduction of about $10 billion a month from its current $85 billion level.

August retail sales increased just 0.2%, missing expectations of 0.4%, though July's figure was bumped up two tenths of a percent, to 0.4%. Meanwhile, the University of Michigan's first reading on September consumer confidence showed a drop to 76.8, down from 82.1 last month, and well below expectations of 82.0. After a weak retail earnings season last month, these reports indicate that consumer demand continues to be weak, a bad sign for the overall economy, as consumer spending is responsible for approximately 70% of economic growth.

Intel stock was leaving the rest of the blue chips in the dust today, gaining 3.6%, as the chipmaker announced it would shut down a plant in Massachusetts that manufacturers outdated chips, and lay off 700 workers. The plant will close by the end of next year as Intel phases out the production of those older-generation chips. The move won it an upgrade from Jeffries to buy, as the research firm said Intel is finally leveraging its manufacturing advantage, and targeting the fast-growing sub-$500 tablet market.

Disney shares continued to move up a day after announcing a $6 billion-$8 billion buyback program next year, increasing 1.8%. Today, the media titan got a boost when research firm Stifel Nicolaus added Disney to its Select list due to its increased share buyback and higher-than-anticipated sales for Disney's Infinity video game.

Finally, Boeing hit another all-time high today, gaining 1.4% as the aircraft-maker said its jumbo 787-9 jet may begin making test flights as soon as next week. With its 787 Dreamliner problems seemingly behind it, and a huge backlog in its other models guaranteeing a solid revenue stream, this news is just the latest sign that clear skies appear to be ahead for Boeing.

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