These Dow Stocks Sank but Didn't Plunge

You can tell it's a bad day for the markets when all 30 stocks in the Dow Jones Industrial Average (INDEX: ^DJI  ) drop. But election disappointment on Wall Street, renewed rioting in Greece, and concerns about worldwide economic growth all contributed to a plunging Dow, which was down almost 370 points earlier in the session before recovering somewhat to finish the day with a 313-point loss. The S&P 500 (INDEX: ^GSPC  ) finished with a similar percentage loss of 2.4%.

In fact, things were so bad for the Dow 30 that only three stocks managed to limit their losses to less than 1%. For the most part, they were exactly the sort of stocks you'd expect to thrive in a down market: defensive issues with resilient demand even in slowing economic conditions.

Disney (NYSE: DIS  ) lost three-quarters of a percent, which gave it the best performance of the day for a Dow stock. The company reports earnings tomorrow, with predictions for a roughly 15% boost in earnings on 5% higher revenue. One thing Disney shareholders will be disappointed about is the end of the election campaign season, which represents a huge portion of overall ad revenue for its television media group. But positive moves like its acquisition of Lucasfilm should help Disney weather any economic storm.

Wal-Mart (NYSE: WMT  ) fell just less than 1%, playing its usual role as the poster child for tough economic times. During the 2008 recession and bear market, Wal-Mart actually gained ground, as shoppers moved down from pricier retail outlets to do more of their shopping at Wal-Mart stores. If the same holds true this time around, it could mark a new move up for the stock, which moved to all-time highs in the past month.

Finally, Johnson & Johnson (NYSE: JNJ  ) also managed to come in with a loss barely under the 1% mark. J&J has struggled with product recalls and slow growth recently, but it's still a bellwether in the health-care space, with exposure to pharmaceuticals, consumer health-care products, and medical devices. People won't stop needing Band-Aids, and so even if a recession comes, J&J should hold up relatively well compared to some other Dow stocks.

Be safe
Big drops are always scary, but the right stocks give you both growth potential and safety from declines. Some of the best prospects are in the Dow. Let me invite you to learn more by reading the Fool's popular special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.


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  • Report this Comment On November 08, 2012, at 9:57 AM, FoolishLonghorn wrote:

    Is there some conspiracy to push Johnson and Johnson at the Motley Fool? I dumped J&J last year, after repeated quality issues, followed up by lousy management response. All of J&J's consumer products have a price premium. And the lower cost alternatives aren't being recalled every few months.

    The stock performance is well below that of the S&P 500 in the last 4 years.

    I have completely lost faith in this company There are much better choices for large cap, dividend payers, both in the medical arena and elsewhere.

    I may need bandages in a recession, but I'll get mine from another company that values quality,

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