3 Stocks That Dragged on the Dow Today

It wasn't pretty, but U.S. stocks finally got into the win column after a long string of losses. By the end of the day, the Dow Jones Industrials (INDEX: ^DJI  ) had given up most of their gains from earlier in the session but still managed to rise 20 points to close at 12,855. The broader market was mixed, with the S&P 500 (INDEX: ^GSPC  ) up about a quarter-percent but the Nasdaq falling.

A few Dow stocks did their best to extend the average's losing streak, though. Let's take a look at them.

Cisco Systems (Nasdaq: CSCO  ) , down 10.5%
Bad earnings can hurt a stock, but for a big company like Cisco, a 10% drop is almost unheard of. But anytime a CEO comes out and says he doesn't like the trends he's seeing in the way his customers spend, you can expect shareholders to get a little scared.

As Fool tech analyst Eric Bleeker pointed out earlier today, this isn't the first time Cisco has let investors down. On numerous occasions in the past two years, investors get excited about the potential for a rebound before an earnings release, only to be disappointed by the reality. But success among Cisco's competitors strongly suggests that any problem Cisco is having is company-specific rather than industrywide.

Caterpillar (NYSE: CAT  ) , down 0.6%
Caterpillar has traded in line with prospects for the overall economy. But today, the company made a move that pushes the company further toward its goal of focusing on its core business.

Caterpillar announced that it had sold a 65% stake of its third-party logistics business to private-equity firm Platinum Equity for $750 million. The cash won't make any significant dent in the company's nearly $36 billion in debt, but as global markets in construction and mining equipment get more competitive, Caterpillar needs to avoid distractions from peripherally related business units. Today's move is a step in that direction.

Boeing (NYSE: BA  ) , down 0.3%
Boeing is down only slightly, with no time-sensitive news having any apparent impact on the stock. But over the longer term, the aerospace and defense contractor faces some big challenges.

Coming back into the limelight lately has been the U.S. government's automatic spending cuts, which could reduce defense spending by another $500 billion on top of previous cuts of nearly that much over the next decade. With the election bringing the government to a near-standstill on several important issues, the problem isn't likely to get resolved anytime soon -- and with Boeing and its peers already taking steps such as cost-cutting measures, layoffs, plant closings, and reorganizations, even more draconian actions could be necessary to get by if defense-budget austerity becomes reality.

Put on your rally caps
These stocks were losers today, but that has almost no bearing on their long-run prospects. Get the big-picture perspective you need from The Motley Fool's special report on long-term investing, where you'll find some useful general investing tips as well as three promising stock names that fit well for many investors saving for big financial goals like retirement. Get your free report today!

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter. The Motley Fool owns shares of Cisco Systems. 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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