Only 1 Dow Loser This Week

For the second week in a row, investors, traders, and speculators had a holiday-shortened four-day week to buy and sell stocks. Having one less day usually doesn't slow the markets down, though, and that was certainly the case this week, as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) posted a weekly gain of 3.84%, while the S&P 500 (SNPINDEX: ^GSPC  ) moved higher by 4.56%, or 64 points. The Nasdaq (NASDAQINDEX: ^IXIC  ) performed the best, as it gained 146 points, or 4.94%, during the first few trading days of 2013.

Two weeks ago, the Dow's 30 components ended the week miserably, as 28 of them traded lower for the week. This four-day trading period was much better for the markets, as only one Dow stock ended the week lower.

The key driving factor for the markets this week was clearly the compromise in Washington that prevented the U.S. from falling off the peak of the fiscal cliff. With the politicians in D.C. agreeing to keep tax rates lower on the majority of citizens, the U.S. was saved from another possible recession, as many economists were predicting would happen if taxes on all Americans rose with the new year. On Wednesday alone, the Dow reacted by surging higher by more than 300 points.

But before I get to the Dow loser, I'd like to point out the big winner of the week. Although the stock was the worst Dow performer of 2012, Hewlett-Packard (NYSE: HPQ  ) managed to become the best stock to own during at least the first week of 2013. With the majority of the Dow technology stocks posting just modest gains of 2% to 3%, Hewlett-Packard posted an astounding 10.91% increase over just the past four trading days. While I don't believe this move higher is a sign of things to come, I also think there is too much risk involved in shorting the struggling personal-computer company at this time.

Other big winners this week were Caterpillar (NYSE: CAT  ) and Alcoa (NYSE: AA  ) , which saw their shares rise an impressive 9.34% and 8.68%, respectively. Both companies are closely tied to the health of the economy and saw their shares depressed as investors waited to see what was going to happen in Washington.

Now to this week's lonesome loser
Last week, shares of UnitedHealth (NYSE: UNH  ) dropped by 1.71% as the majority of the Dow's 30 components fell into the red. But this week, UnitedHealth fell by 2.87%, and it was the only Dow component that ended the week lower. On Thursday, the stock lost 4.7% of its value after analysts at Deutsche Bank downgraded both UnitedHealth and its competitor WellPoint (NYSE: ANTM  ) . Both stocks dropped from "buy" recommendations to "hold" as the analyst sees profits and margins coming under fire in 2013. The reason cited for the downgrade was a belief that medical costs will rise over the coming year while premiums won't.

More Foolish insight
When President Obama was re-elected, shares of UnitedHealth and other health insurers fell immediately. Is Obamacare a death knell for health insurers, or is the market missing out on some of the opportunities the law presents? In this brand new premium report on UnitedHealth, we take the long-term view, homing in on prospects for UnitedHealth in a post-Obamacare world. The report also comes with a full year of analyst updates to keep you covered as key news develops, so don't miss out -- simply click here now to claim your copy today.


Read/Post Comments (0) | Recommend This Article (2)

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: 2180438, ~/Articles/ArticleHandler.aspx, 12/22/2014 11:37:20 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