Dow Dives 179 Points While Google and Lululemon Grab Headlines

Looks like Wall Street's got a case of the ol' Mondays. Fresh off of Friday's very un-cool December jobs report, the Dow Jones Industrial Average  plummeted 179 points to start the week as investors get ready for a Big Mac-sized portion of bank earnings this week. We're at a three-week low, folks.

1. Awful December jobs report still haunting markets
Dude, where are my jobs? The god-awful employment report was ripe in investors' minds Monday, driving the market sell-off. According to Goldman Sachs, the number of workers stuck at home because of the winter apocalypse weather was more than 130,000 more than usual in December. Still, 74,000 new workers in a month is bad.

Why does the employment number matter? Markets had enjoyed an average of more than 190,000 new jobs added since September. Suddenly we're served this big potato in December. A strong employment base is crucial for the American economy, since most dollars spent in this country are from consumers. If consumers aren't making money, it's a major threat for long-term corporate profits.

But the Federal Reserve said the economy was improving, right? That's why this was so scary. The Federal Reserve already moved in December to reduce stimulus, since the economy seems to be progressing well. Investors were still audibly and nervously gulping on Monday in remembrance of the very bad employment report from last week. 

2. Google stock up after big acquisition
It's getting hot in here, because Google  just dropped $3.2 billion in cash for Nest -- the company behind the cool digital thermostat maker that your friends with technology-savvy parents own.
Why the big snag? Google's looking at Nest for its potential to create the "smart home" -- Nest thermostats don't just look hot, they save energy and connect with your phone. Plus they recently unveiled a smoke monitor and have plans to revolutionize other random parts of your house (heated toilet? Please?). Google wants in.
The takeaway is that the move by Google is a big one into a different consumer goods market. It's also not their biggest -- the company had over $56 billion in cash at the end of 2013 and spent $12.5 billion on Motorola Mobility once upon a time. But it's potentially a step in a profitable direction. The stock ended down a bit as investors digested the purchase.  
3. Lululemon drops big after earnings scare
Thanks for the heads-up. Yoga-pants giant Lululemon warned investors ahead of time that its earnings report is not going to look good, cutting its revenue expectations from the last quarter of 2013 from $541 million to $518 million -- and the stock dropped nearly 17% for its worst day since last June.
Why the bad quarter? Santa was just plain mean to retailers this year. U.S. retail sales rose by their lowest amount since 2009, and aggressive cost-cutting tactics hurt retailers from Victoria's Secret to Lululemon. Nothing about the season was namaste.
The takeaway is that Lululemon's bad 2013 just got even worse. First the see-through-pants debacle cost the company millions, and then its co-founder stepped down after insensitive comments about women's curves. Now that Lulu's same-store sales and customer traffic are dipping from this time last year, the company could use some aggressive stitchwork.
  • Retail sales numbers
  • Earnings: JPMorgan Chase, Wells Fargo
MarketSnacks Fact of the Day: India consumes half of the world's whiskey.

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The article Dow Dives 179 Points While Google and Lululemon Grab Headlines originally appeared on

Fool contributors Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs, Google, lululemon athletica, and Wells Fargo and owns shares of Google, JPMorgan Chase, and Wells Fargo. 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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