Market Wrap-Up for June 7 (MTN, MON, WMT, more)

Market Wrap-Up for June 7 (MTN, MON, WMT, more)


Heading in to today, all eyes were on the Bureau of Labor Statistic’s Non-Farm Payrolls job report. After weeks of bearish sentiment, investors were on pins and needles to see how the jobs report would look, as it would give clues to the state of the overall economy and the future of Fed’s bond-buying. Well, the report seemed to send a shock wave of euphoria through the markets, pleasing investors who sent the indices up near 1%+ from the open to the close.

On the earnings front, Vail Resorts (MTN) posted a rise in third quarter profits. Despite missing estimates and opening in the red, the stock closed in positive territory.

Shares of Monsanto (MON) and Wal-Mart (WMT) rose today, after both announced new share buyback programs.

Iron Mountain (IRM) shares plummeted, however, following the news that the IRS is reviewing its REIT conversion.

Wall Street upgrades of Abercrombie & Fitch (ANF), J.M. Smucker (SJM), Yum! Brands (YUM), Microsoft (MSFT), and BlackRock (BLK) caused those stocks to head into positive territory. Downgrades of Intel (INTC), Walter Energy (WLT), and Peabody Energy (BTU) sent shares into the red.

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

Eyes are on Interest Rates

Today’s job report resulted in an increase in interest rates, but the increase was not as large as many might have expected. It seems as though the bond market is taking a breather from its recent sell-off.

Since the beginning on May, interest rates have had a good run, with the 10 Year Treasury Note rising about 50 basis points. But in 2013 this is not the first time that interest rates have risen. There have been moments where the interest rates have risen, with many worrying about a catastrophic spike, only to fall back under 2.00% again. So there many out there thinking that this recent interest rate run is yet another head fake. However, we do expect interest rates to consolidate after this recent run up. Most bond traders will be eying the 1.95-2.25% range as the area to watch. How high the rates will rise is unclear, but nonetheless it will be something investors need to keep an eye on.

For dividend investors, it it essential to pay attention to the interest rate performance in the short- to medium-term as it directly impacts dividend paying stocks. As the rates go up, it is expected that investors will come in to take profits from the dividend plays that have performed superbly recently. Though prices of dividend stocks may fall because of this circumstance, investors shouldn’t be alarmed, but actually pleased that the markets will present better buying opportunities.

Looking Toward Next Week

Looking ahead to the next week for stocks, earnings releases continue to trickle in from a number of companies, including Men’s Warehouse (MW) and PVH Corp (PVH).

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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