Dow, Up 62 Points, Unfazed by Government Shutdown
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.
Well, the shutdown happened, and Wall Street didn't implode on itself. That's because it was selling off on shutdown fears most of last week, so the event was already "priced in." The ineptitude of Congress was assumed. The Dow Jones Industrial Average added 62 points, or 0.4%, to end at 15,191.
The shutdown may not have hammered markets today, but if Washington doesn't start solving problems quickly, contention over raising the debt ceiling could do some serious damage to stocks, the economy, and Main Street.
Somehow it seems ruthlessly appropriate that Merck stock led the Dow's charge on Tuesday, jumping 2.4%. Taking a cue from Capitol Hill, Merck will let go of 8,500 workers as part of a reorganization aimed at cutting costs. It doesn't touch the 800,000 to 1 million federal employees briefly out of a job during the shutdown, but it's a start.
One stock directly benefiting from Obamacare, the legislation at the center of Congress's budget brawl, is UnitedHealth Group , which boasted 1.4% gains today. That's largely due to overflowing initial demand for insurance through the newly established exchanges, as some of their websites malfunctioned Tuesday due to the traffic flow.
Wal-Mart , while gearing up for surging demand in its own industry as the holidays approach, fell 0.5%. The megaretailer is opening two new seasonal warehouses to fulfill online orders in a timelier, more cost-effective manner, which is great. But with relentless competitor Amazon.com hiring 70,000 seasonal workers to smooth out its own business, Wal-Mart's move may be catching the company up instead of getting it ahead.
Lastly, Cisco shares dropped 0.8% after the company announced CEO John Chambers' compensation package for the past fiscal year. The $11.7 million package in 2012's fiscal year wasn't cutting it, apparently, as it totaled more than $21 million in fiscal 2013. It's an untimely announcement for Chambers, who just caused shares to sell off last Thursday after speaking frankly about the tech giant's formidable competition.
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The article Dow, Up 62 Points, Unfazed by Government Shutdown originally appeared on Fool.com.
Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.The Motley Fool recommends Cisco Systems and UnitedHealth Group. It recommends and owns shares of Amazon.com. 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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