Market Wrap-Up for Aug.4 (JNJ, KO, BKS, PCLN, RL, AGU, APC, more)


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I'm not sure if anyone is noticing the pop in Priceline's ( PCLN ) stock this morning, up $50 following the company's earnings beat.

Priceline does not pay a dividend at this time, but I wanted to focus on the manic way investors tend to look at momentum stocks and why long-term investors need to keep exposure to these plays at a smaller part of one's portfolio, if there is an aversion to taking on higher risk. The last time Priceline reported their results the stock ended up getting clocked by $30, taking the stock down below $200 a share. All of a sudden the company gets it all right this quarter and we see it up $50. Unless you possess a trader's edge and discipline to move in and out of stocks like this in a timely manner, there is little reason to stake your long-term dollars on stocks momentum traders bring loads of volatility to. Now, we will on occasion have a situation with a dividend stock, where things could blow up of course, but for the most part, traders are not playing the earnings game with the Johnson & Johnsons ( JNJ ) and Coca-Colas ( KO ) of the world.

Speaking of long-term dollars, there is a lot of chatter about Americans beginning to maybe save too much these days. Ignore all that nonsensical noise you hear and continue to put some of your hard-earned dollars away for your retirement. Don't end up like many who are set to rely on just one source of retirement income, which for a good majority will be Social Security.

Getting back to today's market, Barnes & Noble ( BKS ) popped on news the company is exploring a sale. The stock recently approached all-time lows as the company misplayed an opportunity years ago to acquire ( AMZN ). Don't be tempted by BKS' nearly 8% dividend yield - that payout is certainly not sustainable, and we expect a dividend cut in the near future. The market clearly sees little upside for the book retailing market, thus the long-term fall in shares. Look no further than Blockbuster ignoring the changing market, allowing Netflix ( NFLX ) to come in and basically put the company in the huge bind they are in today. Elsewhere, shares of Polo Ralph Lauren ( RL ) , Agrium ( AGU ) , and Anadarko Petroleum ( APC ) rallied following those companies' reports. Pitney Bowes ( PBI ) went the other way after the company missed earnings estimates and guided lower. Despite another up day today, volume can not seem to break out and it remains a real mystery.

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

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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