Market Wrap-Up for July 10 (FDO, FAST, ADTN, more)

Market Wrap-Up for July 10 (FDO, FAST, ADTN, more)


Following a four-day winning streak, stocks closed mostly flat in today’s trading. The market reaction to the afternoon release of the Federal Open Market Committee (FOMC) meeting minutes was relatively tame, despite an expectation of volatility once traders were able to dive into the document. All in all, investors and traders seemed to take a breather after the recent run-up, jaded by the Fed’s continual communications.

An earnings beat from Family Dollar (FDO) helped its shares rally today. However, shares of Fastenal (FAST) and Adtran (ADTN) fell deep in the red after disappointing earnings releases.

Furthemore, Nu Skin (NUS) shares spiked during today’s trading after the company raised its second quarter earnings outlook. The company also subsequently received a Wall Street analyst upgrade.

Also rising higher today following analyst upgrades were shares of Walter Energy (WLT), Kroger (KR),and Cliffs Natural Resources (CLF). But downgrades of Woodward Inc. (WWD), Meredith Corp (MDP), and Norfolk Southern (NSC) dragged those shares lower.

Be sure to check the Dividend Daily for all the latest earnings reports, analyst moves, and much more.

Invest Based on Knowledge, Not Speculation

Now that we’ve reached the beginning of the summer earnings season, we are finally starting to get a snapshot of how corporations have been fared over the past few months. Though each month we get pummeled with all different sorts of economic data points from a variety of sources (some of which can be beneficial), those indicators do not really give us a true sense of how to make potential investment decisions in stocks. Earnings releases, on the other hand, are the fundamental resource that dividend investors should use to make decisions going forward.

Having said that, you should be wary of making investing decisions based on what you expect a company to report in their earnings prior to the release (known as “playing the earnings game”). Instead, you want to make evaluate your next move after the release, when you can see how the company has performed (and perhaps more importantly, its outlook). Making earnings estimates and predictions is the job of a speculator or a trader, not an investor with a long-term focus. Often those who making earnings predictions just end up getting burned, and at the very least they are just wrong. Over the past couple of weeks heading into earnings season, Wall Street analysts, who are “experts” in the field, have been amending their earnings estimates time and time again. Even those professionals who are well compensated for making predictions find themselves one step behind the curve or just flat out wrong.

As dividend investors, when we evaluate and make our investing decisions we want to make sure it is based on what we know, not what we expect. Though this style of investing may seem boring or too passive, it is without a doubt the best way to build wealth.

Thanks for reading everybody. We’ll see you tomorrow!

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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