3 Dow Stocks Declining Today

Apparently, that's all it takes: As Congressional leaders voice optimism on averting the fiscal cliff, Mr. Market gets his mojo back and stocks begin to post gains for the day, with the Dow Jones Industrial Average (INDEX: ^DJI  ) and the broader S&P 500 (INDEX: ^GSPC  ) up 0.2% and 0.3%, respectively, as of 1:30 p.m. EST. That's my hypothesis, or post hoc ergo propter hoc fallacy, anyway.

The micro view
Hewlett-Packard (NYSE: HPQ  ) shares are down 2.9% so far today. As I pointed out in this column this morning, I believe the stock's decline is related to the disappointing results Dell reported after the market's closed yesterday. Historically, there is a high correlation between the two companies' earnings per share. HP reports results for its fiscal quarter ended Oct. 31 next Tuesday.

Verizon (NYSE: VZ  ) and AT&T (NYSE: T  ) are both losers today, with no identifiable news or fundamental drivers to explain the losses. In fact, the entire telecom services sector is lagging the market. This may be related to a rebalancing out of dividend stocks due to concerns over the potential expiration of the 15% tax rate on dividends next year (part of the "fiscal cliff"). As the following chart shows, dividend stocks, which have won investors' favor in the post-crisis, zero-interest-rate environment, have underperformed the market over the past month:

^SPX Chart

^SPX data by YCharts.

Nevertheless, high-quality dividend shares continue to offer some of the safest, most compelling opportunities to earn attractive long-term total returns in this market. For some of the best examples of these opportunities, click here to receive our free report "The 3 Dow Stocks Dividend Investors Need."


Read/Post Comments (0) | Recommend This Article (3)

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.

DocumentId: 2117280, ~/Articles/ArticleHandler.aspx, 4/23/2014 6:04:41 PM

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