What's Moving the Dow Lower Today

Whether it's bad news or just an excuse for a long-awaited correction, the stock market is punishing investors today. Less-than-perfect employment data combined with the Federal Reserve potentially bowing out of any future stimulus plans are throwing stocks for a loop. At around 2:45 p.m. EDT, the Dow Jones Industrials (INDEX: ^DJI  ) were down 142 points to 13,058, while the S&P 500 dropped 17 points to 1,397.

Among Dow stocks, Caterpillar (NYSE: CAT  ) dropped 1% despite being named as the bull pick of the day by Zacks Equity Research. With record backlogs and a soaring mining equipment business coming from its acquisition of Bucyrus, Caterpillar is well poised to execute on expansion plans and capitalize on emerging-market growth.

General Electric (NYSE: GE  ) didn't get the same analyst love, as Moody's downgraded the bond ratings for the overall company as well as its GE Capital unit, each by one grade. GE, on the other hand, responded that a change in the rating agency's methodology was responsible for the change, and not any real change in GE's credit quality. Shares of GE fell more than 1% in afternoon trading.

Finally, DuPont (NYSE: DD  ) fell 1.3%. Strong earnings results from Monsanto (NYSE: MON  ) as well as the news that Monsanto was raising its profit forecast bode well for the agriculture industry. DuPont in particular stands to benefit from its crop-protection products, which compete against similar products from Monsanto and other companies.

Some perspective
It's important to remember that even with today's declines, the Dow is less than 2% below its recent highs -- and still up around 7% on the year. Moreover, even stocks that are down today can still be tomorrow's winners. The Motley Fool's latest special report on retirement gives you the names of three promising stock picks for long-term investors. Get your free report today before it's gone forever.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. Motley Fool newsletter services have recommended creating a synthetic long position in Monsanto. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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  • Report this Comment On April 04, 2012, at 4:23 PM, WineHouse wrote:

    Gee whiz. You mean the fact that we're still above 13,000 means this that or the other thing? You mean that one day's movement of -- gasp -- one measly percent does or doesn't have significance? Welcome to the world of short attention spans and immediate gratification, folks.

    I actually got a phone call from a friend -- he's 82 years old, and he and his wife are living on their stock portfolio -- who completely liquidated his stock holdings back when the Dow was most recently around 12,000 because he was convinced that it would drop precipitously any day now (down to 6,000 or 7,000 or 8,000 like it did twice in the previous decade) and he would be able to scoop up all his favorite stocks at bargain prices and "make a killing." His phone call was bravado-filled: "the stock market is tanking, just like I predicted! It's started! It's down a huge bundle! You should have sold yours also!" I noted that most of my stocks continued to pay -- and some even increased -- their dividends even during the "down times" and that I was in it for the long haul, not for risky market timing or short term capital gains. If the financial world really collapses around us, the problems will be a heckuvalot bigger than whether or not I'd be able to make a "killing" by buying stocks on the cheap.

    I guess this is my way of saying that articles like this one are basically silly.

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