The Dow's Rebound Didn't Lift These Stocks

Early today, it looked as if stocks were headed for another rout. But as has happened so many times during the rally over the past few months, the market reversed a loss of nearly 100 points during the morning hours to finish nearly flat. After the dust cleared, the Dow Jones Industrial Average (INDEX: ^DJI  ) actually closed up 20 points to 13,146. Most other market averages were lower but finished well off their lows for the day.

Still, the Dow's bungee-cord performance couldn't lift all of its component stocks. Let's look at three Dow stocks that lost ground today.

Bank of America (NYSE: BAC  ) , down 2.4%
Lately, you've been able to count on big banks like B of A to be bellwethers of the overall economic environment. That's probably what's behind the bank's move downward today, as fears about Europe and a possible end to the tepid economic expansion weigh on Investor sentiment.

But B of A actually got good news today. A New York court dismissed a lawsuit asking the bank to repurchase more than $1 billion in mortgage securities linked to its Countrywide unit. B of A is already seeking court approval of a settlement that would send $8.5 billion to investors who lost money on Countrywide securities. The faster B of A can put the financial crisis behind it, the better off it'll be.

American Express (NYSE: AXP  ) , down 2%
American Express fell prey to a typical Wall Street trap: a downgrade. Wells Fargo downgraded the charge-card company this morning, arguing that the stock has limited upside potential from here. Yet strangely enough, the company also raised its price target for AmEx to between $60 and $64.

AmEx is benefiting from improved credit conditions and is preparing itself for the mobile-payment revolution. With a brand that has largely avoided the scorn that Wall Street banks have suffered, AmEx could well be a success story in the financial realm in the coming years.

Disney (NYSE: DIS  ) , down 1.2%
Apart from a bomb at the box office, Disney has been riding high lately. But the company faces a huge new threat from rival News Corp. (Nasdaq: NWS  ) in the form of a rival sports network.

Going up against Disney's ESPN, a Fox-branded national sports network could help News Corp. reverse negative sentiment following its phone-tapping scandal. With the sale of the Los Angeles Dodgers baseball franchise for a whopping $2 billion, it's clear that TV sports has huge value -- and Disney needs to defend its highly lucrative turf to maximize that value for shareholders.

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Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter. The Motley Fool owns shares of Bank of America and Wells Fargo along with a covered strangle position on Wells Fargo. Motley Fool newsletter services have recommended buying shares of Wells Fargo and Walt Disney, as well as writing a covered strangle position in American Express. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


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