Verizon Communications Inc. (VZ), T MOBILE US INC (TMUS), Bank of America Corp (BAC): Stocks Continue to Slide as Consumer Sentiment Falls

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

Stocks are moving slowly lower today as yesterday’s sell-off continues. The Thomson Reuters/University of Michigan reading of consumer sentiment fell to 80 this month from 85.1 in July, and the outlook fell to 72.9. Sentiment can bounce a lot from month to month, but in general investors like to see it moving higher, because it indicates that consumer spending, which accounts for 70% of the economy, will improve in the future.

On the plus side, productivity rose 0.9% year over year in the second quarter after falling 1.7% in the previous two quarters. That indicates that companies are getting more out of each worker, which helps drive profit growth in the long term. But that positive indicator wasn’t enough to spark buyers today, and the Dow Jones Industrial Average is off 0.12% late in trading, while the S&P 500 is down 0.26%.

Verizon Communications Inc. (NYSE:VZ)Verizon Communications Inc. (NYSE:VZ) is the biggest drag on the Dow today, falling 1.8%. T MOBILE US INC (NYSE:TMUS) raised $500 million in its first bond sale since its merger with MetroPCS despite the fact that the company’s majority owner, Deutsche Telekom, is trying to sell $11.2 billion in debt it holds. What Verizon Communications Inc. (NYSE:VZ) investors are seeing is a relatively low interest rate for T MOBILE US INC (NYSE:TMUS) debt, which means investors are willing to fund the one company gaining steam against Verizon Wireless and AT&T. I don’t think Verizon Wireless’ long-term position is in any grave danger, but T MOBILE US INC (NYSE:TMUS) did gain 1.1 million customers last quarter, and Verizon Communications Inc. (NYSE:VZ) may have to reconsider its contracts or pricing if T MOBILE US INC (NYSE:TMUS)gains more momentum.

On the positive side, Bank of America Corp (NYSE:BAC) is up 0.8% today. The company said it plans to fold its Merrill Lynch subsidiary into Bank of America Corp (NYSE:BAC) in an effort to cut costs and make reporting more streamlined. Bank of America Corp (NYSE:BAC) would then take over Merrill Lynch’s obligations and debt, but the company would begin showing a single face to customers. This isn’t a surprising move and probably doesn’t change the investment thesis, even if the company does see some cost savings.

The article Stocks Continue to Slide as Consumer Sentiment Falls originally appeared on Fool.com and is written by Travis Hoium.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!