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These 4 Stocks Have Held the Dow Back

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The Dow Jones Industrials (DJINDICES: ^DJI  ) hit its first all-time record high since 2007 on March 5. Yet since then, the Dow has gone on a huge run that has included 17 more record highs, gaining an additional 850 points since early March.

So far, the Dow has thwarted investors who believed that a correction would be imminent as soon as the market hit new highs. Yet some of the Dow's components haven't participated in the market's rally since early March. Let's look at the four stocks that have declined since the Dow's initial March 5 record close.

General Electric (NYSE: GE  ) , down 2.9%
The big news for GE over the past two months came in late April, when the conglomerate reported earnings. On the whole, GE has a lot of good things happening, with its relatively new emphasis on oil and gas equipment paying off with 24% better sales, and its aviation unit seeing nearly twice that level of growth. Yet the big problem for GE has been Europe, where major sales declines reflect the economic difficulties that have plagued plenty of companies doing business on the continent. Even if the U.S. economy keeps plowing forward and other areas of the world see accelerating growth, GE needs to get its act together in Europe to boost growth across the entire company.

Caterpillar (NYSE: CAT  ) , down 1.1%
For Caterpillar, the past two months have been quite volatile, with the stock having dropped about 10% only to recover nearly all of that lost ground more recently. Just before earnings, Caterpillar took a big hit when the bottom fell out of the gold market, as gold prices fell more than $140 in a single day. The impact of gold's decline on its mining equipment business could be huge, as miners struggling with much narrower margins will have less money to spend on capital expenditures for Caterpillar equipment. Yet since then, macroeconomic moves to bolster world growth, including rate cuts from the European and Australian central banks, have given investors hope that commodities will bounce back and that mining activity will resume. Now, Caterpillar just needs to see that turn into a reversal of horrendous sales trends in recent months.

IBM (NYSE: IBM  ) , down 0.5%
Tech giant IBM has also seen big swings lately, with a huge plunge after the company's earnings announcement in mid-April. Big Blue suffered especially hard from weakness in China, which rippled beyond its government contracts to hurt businesses as well. Moreover, even though IBM has pioneered the successful business strategy of focusing on high-margin segments rather than low-margin commodity businesses like basic hardware, competitors are finally catching on and giving IBM a run for its money. Still, IBM responded to the price decline by announcing further share buybacks, which should help boost earnings-per-share figures and keep IBM on track for its long-range goal of $20 in EPS by 2015.

JPMorgan Chase (NYSE: JPM  ) , down 0.5%
Rounding out the four losers is JPMorgan, whose stock has largely been treading water amid controversy over CEO and Chairman Jamie Dimon. Some institutional investors are calling for Dimon to give up at least part of his current dual role at the big bank, arguing that recent miscues at JPMorgan indicate an inability on Dimon's part to manage the bank's extensive operations. Yet looking at the stock's performance since the financial crisis, other investors argue that blaming Dimon despite his success makes little sense. With the annual shareholder meeting approaching, the final resolution of Dimon's fate should help get the stock out of its holding pattern -- one way or the other.

A market of stocks
These four stocks and their laggard performance show that even when stock market benchmarks like the Dow are moving solidly higher, some individual companies inevitably miss out. You can't expect to avoid every lagging stock, but by noting the warning signs, you can gain experience that could help you steer clear of at least some pitfalls for your portfolio.

With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether JPMorgan is a buy today, check out The Motley Fool's premium research report on the company. Click here now for instant access!

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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DOW 17,706.05 213.12 1.22%
S&P 500 2,076.06 28.02 1.37%
NASD 4,861.06 95.27 2.00%

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Related Tickers

5/24/2016 4:32 PM
^DJI $17706.05 Up +213.12 +1.22%
CAT $71.09 Up +0.69 +0.98%
Caterpillar, Inc. CAPS Rating: ***
GE $29.85 Up +0.36 +1.22%
General Electric C… CAPS Rating: ****
IBM $148.31 Up +1.54 +1.05%
International Busi… CAPS Rating: ****
JPM $64.54 Up +1.08 +1.70%
JPMorgan Chase & C… CAPS Rating: ****