Herbalife and Tiffany Climb Higher Today, While Boeing Is Set for Big Move Tomorrow
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.
Heading into the Federal Reserve's last Open Market meeting of 2013, which will also be Chairman Ben Bernanke's last, investors voiced their opinion that the Fed probably won't begin tapering this year. Stocks were up today, and the major indexes all closed in the black, as the Dow Jones Industrial Average jumped 129 points, or 0.82%, while the S&P 500 increased by 0.63%, and the Nasdaq rose 0.71%.
The move today contradicts what was happening last week, when stocks fell on murmurs that the central bank may begin tapering its $85 billion-a-month bond-buying program before Bernanke steps down. Those fears sent the Dow lower by 264 points last week. But with little changing in terms of the economy over the past few days, today's market rise perhaps signals that those fears were overblown. If the Fed keeps its foot on the gas, further economic stimulation should continue to help consumers and businesses, as many are still dealing with the lagging aftermath of the financial crisis.
Now let's take a moment to look at a few of today's big winners and see what motivated investors to push their prices higher.
Shares of the controversial Herbalife soared today, gaining 9.43% during the regular trading session and moving even slightly higher in the after-hours session. The move came after the company reported that its fiscal 2010, 2011, and 2012 consolidated financial statements and the quarterly statements released thus far in 2013 all came back from a reaudit with no material changes made. Herbalife shares had plummeted after activist investor Bill Ackman called the company a pyramid scheme that the authorities would eventually shut down. He'd built a large short position based on his outlook, and on Nov. 22 he told Bloomberg TV he'd lost between $400 million and $500 million on the trade to that point. If Ackman's firm, Pershing Square Capital Management, still holds the short position, today was certainly not a good day at the office.
Another big winner was jewelry giant Tiffany , as shares rose 1.72% on a ratings upgrade from "sell" to "hold" by Canaccord Genuity analyst Laura Champine. She also bumped her price target from $65 to $83, which is still below the current $90.85 share price. Canaccord now believes gross margins will increase in the future and give earnings per share a boost. The firm accordingly upped its EPS estimate for 2014 by $0.41 to $4.51. While the analyst didn't give a screaming recommendation for the stock, investors were certainly happy with the rating change and the improved outlook.
Finally, despite rising only 0.67% during regular trading hours today, shares of Boeing are up nicely in the after-hours session, which should translate to a big move tomorrow. After the closing bell, the company announced that its board of directors had approved a $10 billion share buyback and a 50% increase to its current dividend. The buyback amount is on top of the current repurchase program Boeing has in place, which has roughly $800 million left to spend. The current quarterly dividend of $0.485 has been increased to $0.73, which will give the company a total yearly dividend amount of $2.92 per share and a current dividend yield of 2.16%.
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The article Herbalife and Tiffany Climb Higher Today, While Boeing Is Set for Big Move Tomorrow originally appeared on Fool.com.Fool contributor Matt Thalman owns shares of Berkshire Hathaway. Check back Monday through Friday as Matt explains what causing the big market movers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513.
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