April 28, 2012
After a slew of earnings reports, the Dow Jones Industrial Average (INDEX: ^DJI ) gained 1.6% this week.
But three stocks lagged behind the others:
Weekly Price Change
|Wal-Mart (NYSE: WMT )
|Procter & Gamble (NYSE: PG )
|Caterpillar (NYSE: CAT )
So what's going on with these companies?
Shares plunged afterThe New York Times revealed that the discount retailer had been systematically bribing Mexican officials to speed up approval of new store construction to get an advantage over competitors. The allegations aren't particularly surprising, per se; what makes the 8,000-word piece so damaging is its thorough documentation of the bribes as well as the cover-up that seemed to extend up through the highest reaches of Wal-Mart management and how vital Wal-Mart's Mexican operations have been to its growth.
Procter & Gamble
P&G reported a 16% decline in its net income, which wasn't actually as bad as analysts had expected. But investors are more concerned about the company's prediction that weak growth in developed economies, Venezuelan-mandated price cuts, and rising costs could pressure full-year earnings.
Caterpillar reported a 29% surge in earnings, in large part because of its acquisition of Bucyrus. Although that topped analyst forecasts, it wasn't enough for investors. Weakness in the market for construction equipment in Brazil and China meant that Cat sales came in lower than analysts had expected.
Wal-Mart, P&G, and Caterpillar were the worst performers this week, but it's important for us to remember that it's long-term performance, not daily price fluctuations, that ultimately matter to investor returns. If you're interested in one stock that our chief investment officer picked to crush the market over the long haul, check out our brand-new report, "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company -- and it's free.