Markets Rally Despite 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.

As of 12:45 p.m. EDT the Dow Jones Industrial Average is higher by 68 points, or 0.45%, while the S&P 500 is up 0.79% and the NASDAQ has risen 1.02%. These moves come as the federal government is partially shut down today and Congress presumably is working toward a compromise on the budget. At this time there are no signs that an agreement will be had today. Most economists estimate that a shutdown lasting one week would only lower GDP by 0.1% to 0.2%, with a two-week shutdown costing 0.3%.

As most investors know this prediction, and today being day one of an event that may only last a few days, they are looking past the current shutdown and what will likely amount to a negligible setback to the economy. That said, there are still a few losers within the Dow today, but they are moving lower for reasons other than the shutdown.

Shares of Wal-Mart are lower by 0.5% after competitor announced yesterday that it would hire 70,000 seasonal employees this year. That figure is above Wal-Mart's seasonal staff increase of roughly 55,000 and an increase of 50% from what Amazon hired last year. Just last week Wal-Mart was in the spotlight for cutting inventory orders -- a sign that product is not moving. With Amazon increasing its holiday staff, the signs may indicate that the one-time retail king is losing business to the online darling at a much faster rate than expected.  

Shares of Chevron have been flat today after the company received what could be seen as either bad news or good news. A federal judge in Brazil yesterday dismissed a civil lawsuit pending against Chevron for a 2011 oil spill. The prosecutor was seeking $20 billion in damages for the more than 110,000 gallons of oil that leaked into the ocean near a Chevron well. But the judge decided to make Chevron pay only $150 million in damages for "compensatory activities." So while the company still has to fork over $150 million, the outcome is much better than what might have been ordered. Shares are currently up 0.2%. 

Lastly, shares of Nike are down 0.1% today after analysts at JPMorgan Chase increased their price target on the stock to $80. When a stock is upgraded or its price target is given a boost, the stock normally moves higher. Then again, most investors thought the markets would fall if the government shut down, and that has not happened either. JPMorgan said that as Nike continues to drive margins, the stock will continue to move higher.

Is Wal-Mart on the Way Out?
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Fool contributor Matt Thalman owns shares of JPMorgan Chase. and Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513The Motley Fool recommends, Chevron, and Nike. The Motley Fool owns shares of, JPMorgan Chase, and Nike. 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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