Time flies (and scientists may know why) (7/25/14)

Investors focused on earnings today, as disappointing results from Amazon and a cut in Visa’s revenue forecast dragged the markets lower.

The Dow lost 123 points, with 24 of its 30 components declining; the S&P 500 Index dropped 9; and the Nasdaq was lower by 22. Decliners led advancers by about two to one on both the NYSE and the Nasdaq. The prices of Treasuries strengthened. Gold futures added $12.50 to close at $1,303.30 an ounce, and the price of crude oil edged up $0.02 to settle at $102.09 a barrel.

For the week, the Dow slipped 0.83 %, the S&P 500 Index was even, and the Nasdaq gained 0.4%.

In Earnings News:

-       Even though revenue increased by 23%, Amazon.com posted a loss of $126 million in the second quarter and warned that operating losses could reach $810 million in the current period as the company continues to pour money into new businesses and technologies. Amazon’s operating margin this quarter fell to -0.1%, down from 0.7% last quarter and 0.5% a year ago. Investors were disappointed in the results and sent shares (AMZN) lower by 9%.

-       Visa reported a better-than-expected 11% increase in second-quarter earnings; however, the company cut its revenue forecast for the rest of the year, citing a slowdown in international transactions due to a stronger dollar. Visa’s stock (V) dropped 3%.

-       Online music-streaming service Pandora saw a better-than-expected increase in revenue of 43% in the second quarter but still lost 6 cents a share. Subscriber growth was strong, but as more people join the service, royalty costs also increase. Pandora also lowered its third-quarter outlook, and its shares (P) fell 10%. 

-       Starbucks announced its third-quarter earnings increased by 23%, helped in part by stronger-than-expected same-store sales and new menu items. The company also said that its per-share profit for the coming year will come in at the low end of its 15-20% estimate due to higher coffee prices. Analysts expected that number to be higher, and Starbucks (SBUX) closed lower by 2%.

In Other Business News:

-       Orders for durable goods, items expected to last three years or longer, rose by 0.7% in June, according to the Commerce Department. The increase was driven by higher demand for machinery, computers, and electronics and exceeded economists’ expectations of 0.5%.

*****

It’s July 25 already. I bet you’ve heard at least one person comment on how fast the summer has gone today (and if not today, sometime this week). 

Who (or what) is to blame for the rapidly accelerating minute hand? Is it the weather? Well, when you have a polar vortex in July and nighttime temperatures dropping into the thirties, it’s hard to believe summer’s halfway over when it doesn’t even feel like it’s started (at least for us here in the Midwest). 

Or, is it the retailers who are in full back-to-school mode at the beginning of July (or Halloween mode in August, or Christmas mode in October, etc.)?

Scientists have started researching why it feels like time flies, and while they haven’t pinned down the exact reasons yet, they have a couple of ideas, according to FastCompany. One is that as we age, our bodies produce less dopamine, a chemical that helps control our internal clock.

Another theory is called “Habituation Hypothesis” and could be described as “been there, done that.” When you’re young, everything is brand new and experienced for the first time. That sensation diminishes as we get older. Our bodies slow down, and we need to conserve mental energy for more important tasks, so we ignore the everyday patterns in life. The more we tune out, the quicker time goes by. 

Fortunately, they believe there are ways to slow down the clock. Those ways can be broken down into two categories: stimulating and saving brain cells. Stimulate your brain cells by breaking up those everyday patterns. Experience awe-inspiring events on a regular basis and embrace new things. On the other hand, don’t waste your energy succumbing to “analysis paralysis” (i.e., overanalyzing things) and multitasking.

Now that we’ve got that sorted out, I’d like these scientists to move on to some other mental challenges I have. For example, please help me remember why I just walked into the room, because it seems that as soon as I pass through the doorway, my mind goes completely blank. Or, help me figure out why I was able to sing along to every song I heard on the radio this morning, but I can’t remember the witty comment I was going to use to end this article today. With my luck, they’ve probably covered this already, and it just slipped my mind.