Dow Dips on Stimulus Doubts as Expedia, ExxonMobil Rise

Dow Dips on Stimulus Doubts as Expedia, ExxonMobil Rise

Yesterday's market moves
Dow Jones Industrial Average
: 15,546, -73 (-0.47%)
S&P 500: 1,757
, -7 (-0.48%)

Hey, buddy -- wipe that Almond Joy smudge off your lip and liberate your pockets of Jolly Rancher wrappers. If you want to look presentable post-Halloween (and aren't still wearing that nurse outfit), it's best to minimize chocolate residue on your face. And you should know that the Dow fell 73 points Thursday as investors continued to worry that the Fed will slow its stimulus efforts in the near future. The last day of October was also all about corporate earnings.

1. ExxonMobil profits drop 18% on slick oil margins
The oil and gas-station company known as ExxonMobil reported earnings on Thursday that were 18% lower than last year's. The hefty $7.9 billion in profits still beat analyst expectations, so the stock rose 0.9% in the New York Stock Exchange after the news. Once the biggest company in the world, Exxon is up just 40% since the market bottomed out during the recession in March of '09, while the S&P 500 has grown 157% in the same time period.

What gives?

The proud Texas-based ExxonMobil has largely maintained its business strategy of finding oil all over the world, then extracting and refining it for our gas-guzzling pleasure. Despite oil prices remaining at historically elevated levels, profit margins contracted in the quarter on competition from state-owned oil companies like those in Russia and Venezuela. And Saudi Arabia. And Kuwait.

Long story short, Exxon may be missing the fracking-fest, and it may be regretting it. Texas has created more jobs since the recession than most entire countries, and it's largely thanks to this new thing called "hydraulic fracturing" (a.k.a. "fracking") for natural gas. The industry unleashed a proliferation of low-cost energy in America, and Exxon has allowed smaller companies to dive in and take the profits. But profits have consistently dipped for Exxon over the past two years, so we wonder how long it can hold out from all the fracking going on in the Lone Star State.

2. Expedia earnings take off
No one likes travel puns, but shares of Expedia seriously lifted off, rising more than 18% Thursday after the company reported some super-impressive earnings after the market closed. So how did it go? If a regular earnings report is like an Amtrak trip to Philadelphia, then Expedia's earnings report was like an all-you-can drink Concord flight to Paris with Heidi Klum as the pilot.

More specifically, Expedia's revenue of $1.4 billion last quarter passed analysts' expectations by a vacation-worthy $30 million, as the company grew 17% year over year.

Where did all this growth come from? A bunch of things. First, Expedia's hotel room bookings have popped 20% year over year. Second, advertising revenue from the website is up. And third, international sales jumped more than 40% from a year earlier.

The takeaway is that it's not just Expedia enjoying the travel love. Expedia's biggest competitor, Priceline, is up 70% this year -- that's right, the original Internet travel firm most associated with Will Shatner and the dot-com bubble has been leading the industry.


MarketSnacks Fact of the Day: While overall beer sales were down last year, microbrew sales popped by 12%.

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