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Business & Real Estate

Checking stocks in down market

We’ve all had that gut-clenching feeling when we check our stocks and the market is down more than 100 points. Scanning the headlines for more information is a common practice if we’re concerned and thinking of making a move.

However, the most common complaint about the stock market in recent days has been dullness. Even after the Dow Jones industrial average fell more than 100 points on two days last week, we expected to see some life sooner or later.

Despite last week’s activity, the Dow Jones industrial and transportation averages and the S&P 500 Index reached all-time highs in June, and we are still in the bullish camp after those two days of worrying. The bull returned to the market Friday, and our emotions quieted down.

Friday, the market closed in positive territory, with the Dow up 41.55 at 16,775.74. Those two days of emotional pullbacks during the week should be viewed as corrections in an ongoing bull market.

Two Town Crier “50” stocks are in the news.

• Apple Inc. (AAPL; $92.14) has been good to investors. In April, the iPhone and iPad maker announced plans to split its stock for the first time in nine years. Apple then raised its quarterly dividend, committed an additional $30 billion to buying back its stock and made a $3 billion deal to acquire headphone maker Beats Electronics LLC.

Apple executed a 7-for-1 stock split June 2. Each Apple stockholder received six additional shares for every share he or she owned. Apple’s outstanding shares will increase from 861 million to approximately 6 billion. When the market closed May 30, the stock price stood at $645.57. When it opened June 2, the price was $92.22.

Apple has split its stock three times, in 1987, 2000 and 2005. Each of those splits was a 2-for-1 exchange. Now that Apple shares are trading below $100, market watchers question whether the stock will be the next addition to the Dow Jones industrial average.

Companies split their stock to make shares more affordable to individual investors, allowing them to buy 10 shares for $50 rather than one share for $500.

Analysts recommend Apple stock as a strong buy, with very few deeming it an underperform or sell. The mean target price for stock is $92.21, with a high of $111.

• Google Inc. (GOOG; $542.81) is reaching for the stars again, acquiring Skybox Imaging Inc. to take pictures in the sky. With Skybox, Google can access data and an impressive number of high-resolution pictures of Earth and its inhabitants.

Three Stanford University graduate students launched Skybox five years ago, using advances in computer software and hardware to build smaller, cheaper satellites.

Google paid $500 million for Skybox – the first commercial venture to provide high-resolution video. Google also hopes to improve Internet access and disaster relief to remote regions via Skybox’s engineering talent and technology.

Google recently made headlines for field-testing a fleet of helium balloons equipped with radio transmitters to deliver Internet service to remote parts of the world. The company in April announced its purchase of drone-maker Titan Aerospace, enabling aerial mapping for future Internet projects.

The upgrade and downgrade history for Google stock remains a buy from most research firms.

Clyde Noel is a Los Altos Hills resident and longtime investor in stocks.

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