3 More Reasons Why the Dow Closed Down

After the two-day hiatus, the markets were mixed today. Pent up demand helped the Dow Jones Industrial Average (INDEX: ^DJI  ) pop out of the gate this morning but, by midday, the index had turned negative. As the closing bell rang, the Dow sat at 13,096, down 10.75 points, or 0.08%. Nineteen of the Dow's 30 components closed in the red. This afternoon, I explained why Disney (NYSE: DIS  ) , Boeing (NYSE: BA  ) , and Cisco (Nasdaq: CSCO  ) were moving lower; now I'll explain the forces that caused Verizon (NYSE: VZ  ) , AT&T (NYSE: T  ) , and Travelers (NYSE: TRV  ) to drag the Dow down.

So why are they down?
Verizon and AT&T were both trading lower today. On Tuesday, the Federal Communications Commission reported that Hurricane Sandy damaged cell phone towers in 10 states. The FCC claimed that roughly 25% of the towers in the storm's path needed service, and were not working properly. The majority of the disruptions were related to the Internet and cable TV, not wireless communications. Verizon's spokesman Tom Pica claimed that 94% of the company's cell sites were up and running.

All three of the major cellular providers were affected by the storm, and have reported that they were assessing the damages and working diligently to repair all equipment. Similar to the electric utilities, the communications companies will likely see negative impacts on their next earnings releases. Verizon's shares ended the day down 0.2%, while AT&T's shares lost 0.12%.

The hurricane has now come and gone, but it left billions of dollars of damage behind. Now, the big insurance companies will be putting out to reimburse losses related to the storm. An analyst from Morgan Stanley claims that Travelers, Allstate (NYSE: ALL  ) , and Chubb (NYSE: CB  ) were the three insurers who will be affected the most by storm-related damages. The insured damages are now being estimated at $5 to $15 billion dollars. At the close of today's trading session, Travelers share price was lower by 0.87%, while Allstate ended down 0.42%, and Chubb's stock was cut by 1.26%.

Foolishly investingIf you have been investing more than one day, you fully understand that price moves happen daily, mostly on news that won't have any long-term affects on a company's earnings potential. But, if you're the kind of investor who doesn't like big moves and would rather see steady growth over a number of years, this report on 9 Rock Solid Dividend Paying Companies will give you some great insight into some of the world's strongest companies, which shouldn't have major stocks moves. Click here today to start building your portfolio. 

Matt Thalman has no positions in the stocks mentioned above. The Motley Fool owns shares of Walt Disney and AT&T.; Motley Fool newsletter services recommend Walt Disney and AT&T. 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 Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2087809, ~/Articles/ArticleHandler.aspx, 9/20/2014 2:23:35 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement