Dow Rebounds, Netflix and Melco Crown Entertainment Soar

Dow Rebounds, Netflix and Melco Crown Entertainment Soar

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.

After five straight days in the red, the Dow Jones Industrial Average returned to its bullish ways on Tuesday, closing higher as consumer confidence continued to rise. The "present situation" sub-component tacked on 5% from December levels to settle at 79.1, the highest reading yet seen in the economic recovery.

While this bodes well for consumer spending, U.S. manufacturing was weak in December -- durable goods orders fell markedly, slipping 4.3% and underperforming even the low range of expectations. Despite this, Wall Street managed to remain upbeat as all eyes turn to the Federal Reserve policy meeting tomorrow afternoon. The Dow closed up 90 points, or 0.6%, to end at 15,928.

Walt Disney stock helped the Dow edge higher today, tacking on 0.9% in trading. While Walt Disney's animated holiday film Frozen has far exceeded most expectations, grossing $775 million in worldwide box office sales to date, the company has one of the deepest lineups of entertainment assets in the world, making Frozen just the tip of the iceberg. Though Disney's Marvel Studios is at the forefront of a growing war against rival DC Comics for box office dollars, other Disney-controlled ventures, from its theme parks to the Star Wars franchise to cash cow ESPN, don't face the same level of competition.

Owners of Melco Crown Entertainment Limited , the Hong Kong-based casino and resort operator, enjoyed a much-needed reprieve today, as shares surged 6.2%. Melco Crown Entertainment stock had retreated more than 14% in just five days before today's rebound, which came after Deutsche Bank analyst Karen Tang sang notes of praise and emphasized the continued strength of Macau's gaming industry. Shareholders will get an early peek at what to expect out of Melco's Macau operations tomorrow afternoon, when Las Vegas Sands reports quarterly earnings. Despite its name, Las Vegas Sands owns and operates a handful of resorts and casinos in Macau, the current undisputed gaming capital of the world.

Shares of Netflix soared to another all-time high Tuesday, adding 6.7% as a Wall Street Journal article highlighted the company's expansion plans in Europe. While Europe is rife with opportunities for video-streaming services and remains the logical place for Netflix to focus its international efforts, there are still some potent challenges ahead. A fractured market full of numerous competitors awaits, and regulatory issues -- France won't allow movies less than three years old on streaming services -- pose significant hurdles for Netflix. Investors don't seem to be too worried, however, especially after the company crushed Wall Street estimates last week.

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John Divine owns shares of Apple and Google. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.The Motley Fool recommends and owns shares of Apple, Google, Netflix, and Walt Disney. 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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