Dow Still Stuck in Fed Funk

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

For the third day in a row, the Dow Jones Industrial Average finished in the red as worries about the Fed's looming stimulus taper continue to spook Wall Street. The blue chips were down nearly 100 points at one time this morning, but gained over the course of the afternoon, ending down 48 points, or 0.3%. Today, further remarks from Fed officials drove investors away a day after two regional presidents of the central bank said the taper could begin as soon as next month. The president of the Cleveland Fed, Sandra Pianalto, this morning added that the Fed would begin curbing its bond purchases if the labor market continues its moderately strong growth. On a day with no major economic reports or earnings releases, reading the Fed's tea leaves remained the market's No. 1 preoccupation.

On the Dow today, Disney dropped 1.7%, making it the index's worst performer after its earnings report came up a bit short last night. Adjusted per-share profits increased two cents to $1.03, beating estimates of $1.01, while revenue missed expectations, increasing 4% to $11.6 billion. Analysts had projected $11.7 billion. Disney also revealed that it would take as much as a $190 million writedown on the box office bomb The Lone Ranger, though that loss will hit the bottom line in a later quarter.

Microsoft , meanwhile, was the Dow's biggest winner, gaining 1.5% following reports that the Windows maker became the world's No. 3 smartphone seller, surpassing Blackberry and Symbian, as its market share grew from 3% to 4%. The numbers indicate that Microsoft still has a way to go before challenging Apple and Google in the mobile arena, but the improvement is heartening nonetheless as Microsoft needs a foothold in growing markets.

Outside the Dow, shares of Tesla Motors were zooming ahead once again, up 14% after hours thanks to another blockbuster earnings report. The upstart electric-car maker posted adjusted earnings per share of $0.20 when analysts had expected a $0.17 loss, and said it had sold 10,500 Model S sedans in the first half of the year. The company added that it was on track for sales of 40,000 in 2014, and adjusted revenue of $551 million also trounced expectations of $383 million. Tesla shares have been on fire this year, having gained 350% as the company is firing on all cylinders. The valuation may be vertigo-inducing to some, but this could be the kind of disruptive company that comes along once in a blue moon.