Dow Starts Recovering From Early-Morning Drop

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) opened flat this morning before a sharp fall, bringing it down 40 points in the first few hours of trading. While this drop isn't anything investors haven't seen in the last week, it's still a disappointing start for the index, which was expected to hold firm on a quiet news day. The index has gained back half of its morning loss, so there's plenty of room for recovery before the closing bell.

While none of the Dow's component stocks are moving greatly this morning, here are the two biggest gainers and losers so far today.

Winners
As of this writing, only 11 of the Dow's 30 stocks are up, with the biggest winner being Bank of America (NYSE: BAC  ) . Though the biggest news story for the bank is a few weeks away, investors may be getting excited with anticipation. With the results of the required "stress tests" coming out in the next few weeks, investors are looking for news of increased dividends from B of A. With its almost famous penny-per-share dividend, it's not a big stretch to believe that the bank could quadruple its payout with a positive result from the tests. After regulators denied a dividend hike in 2011, the bank has been deleveraging and improving its capital reserves, making many analysts and investors confident that a request this year will not be denied.

Pfizer (NYSE: PFE  ) is second on the list of Dow winners this morning. A few bits of news may be contributing to the pharmaceutical giant's improvements. The South African Competition Tribunal conditionally approved the merger of Pfizer's infant nutrition business, Pfizer Nutrition, and Nestle South Africa. The commission's approval comes with a transitional rebranding requirement, due to the concern that the merger would lead to higher infant formula prices. Instead of enforcing rules that may compel Nestle to sell off the Pfizer formula brands, the company is required to license the brands to a third party for 10 years, followed by another 10-year blackout period, during which Nestle cannot introduce the Pfizer brands to the market.

Pfizer is also in the process of cutting its clinical research operation in Singapore in order to add more than $1 billion to its budget. The company is downsizing its R&D division, with the hopes of cutting $1.3 billion during 2013.

Losers
Home Depot (NYSE: HD  ) has the distinction of being the biggest loser thus far in trading. Though there are plenty of signs that the home improvement retailer has much to look forward to in the coming month with housing on the rise, investors may be a bit cautious yet. The retailer announced that it would be hiring 80,000 new temporary employees in the coming months, a 14% increase from the chain's 2012 hiring rate. On top of that announcement comes another that may have investors worried. Depot has said that it will be dropping its current fleet of BlackBerry phones (used by managers and supervisors) in favor of new Apple iPhones. And while that may not bode well for BlackBerry overall, the cost of replacing the 10,000 phones may be a bit high for investors to stomach.

Wal-Mart (NYSE: WMT  ) was also on the decline this morning. And though there hasn't been any big news for the retailing giant, investors may be wary of some small-town news. In several instances, the superstore chain has been hitting a bit of turbulence in its quest to expand the new Neighborhood Market store format. In places like Springfield, Ill., the company has been fighting for council approval to develop its new stores, with lots of opposition from local residents. And while Wal-Mart is no stranger to this kind of fight, it may be disappointing to investors that its smaller store format is proving to be just as troublesome as its superstores, making further expansion more difficult.

Are you at ease... or nervous? It's been a great five-year run for investors, with the Dow and S&P at or near all-time highs. Yet fears abound. When will the next downturn hit? Will political gridlock lead to portfolio-killing inflation? To learn how to protect your portfolio, click here for free guidance from the Motley Fool Pro Academy!


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