Markets Big Three-Day Run Comes to an End

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Before today, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) had been on quite the three-day run during which time, it rose more than 365 points. But, the streak didn't last very long as today, the index lost 114 points, or 0.8%. The other two major indexes didn't perform as poorly: the S&P 500 only lost 0.43%, while the Nasdaq actually gained 0.04% today.

The only major economic data hitting the markets was the University of Michigan's consumer sentiment index, which came in at 84.1, and was higher than economist's expectations of 83, but lower than May's reading of 84.5. The slight drop wasn't likely the macro event that caused the Dow's decline today. That could have been the confusing message investors have been receiving from the members of the Federal Reserve.

Just a week ago, we heard Ben Bernanke discuss the central bank's plans for the future, and how the bond-buying programs would soon begin to wind down, but today, a number of other Fed members discussed with the press how those programs would likely be in place for some time. They also attempted to further explain what the Fed will do. All the information and explanations don't seem to be helping, but simply making investors more confused about the future and, thus, stocks sold off.

This morning, I discussed why IBM, Johnson & Johnson, and Alcoa were all moving lower; now let's take a look at three of the other Dow losers today.

Shares of DuPont (NYSE: DD  ) struggled today despite good news from the Department of Agriculture. It's been reported that farmers planted soybeans and corn in record numbers this year, and 93% and 90%, respectively, of the seeds used for those crops were genetically engineered. As DuPont is one of the largest seed suppliers, this should mean that the company's upcoming earnings and revenue will be higher than in previous years. But, as my Fool Colleague Travis Hoium noted, when this information hit the markets, the futures prices of both crops fell, which could mean that the increased demand may not last. DuPont closed the day lower by 2%.

Shares of Verizon (NYSE: VZ  ) also fell lower on a day when the company and its wireless subscribers were celebrating. The company finished its nationwide rollout of its 4G LTE network today in Parkersburg, W.Va. The network now covers more than 95% of the U.S. population, and encompasses 99% of its 3G network. But, just as Verizon finishes its buildout, rival T-Mobile announced it had purchased more spectrum for its own 4G network from U.S. Cellular. The additional spectrum will allow T-Mobile to expand 4G service to another 29 U.S. cities. While Verizon has a huge head start on the competition, it surely can't sit back and relax. Shares of Verizon fell 1.29% this afternoon.

Lastly, Merck (NYSE: MRK  ) declined 1.76% today on news that the European Medicines Agency authorized two different drugs similar to Merck and Johnson & Johnson's rheumatoid arthritis medication Remicade. While Remicade is J&J's top-selling product, the decision may be more damaging to Merck than J&J. This was the first time that the monoclonal antibodies market was opened up to generic pharmaceutical companies. It had been believed that "large molecule" medicines would be protected even after patents expired, because those producing monoclonal antibodies argue that biosimilars are not identical and carry higher risk for patients. This decision to open the market up to generics will surely hurt the multinational drug manufacturers such as Merck's fellow Dow component Pfizer, and put further pressure on them when their patents expire. 

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  • Report this Comment On June 28, 2013, at 9:26 PM, nomofunfun wrote:

    Thankfully, DuPont is a WINNER most days, unlike Monsanto which is tanking and trying to blame industrial espionage on its secret attempt to spike the wheat supply with its Frankenfoods wheat.

    FUNny how a Monsanto shill or two will come along trying to badmouth DuPont, only to make themselves look hypocritical

  • Report this Comment On June 29, 2013, at 10:01 AM, funfundvierzig wrote:

    DuPont's record in the 21st century has been decidedly dismal, a disaster for DD's long-suffering shareholders.

    $10K invested in 1999 in the long mismanaged DuPont Company ekes out to a

    paltry $14K in Q2, 2013, fourteen years later, total investment appreciation plus dividends (not re-invested). Annualized, DuPont feebly grew @ 2.5%. That is hardly the performance of "a great American company" like Monsanto. Or Apple or Microsoft or Amazon or Starbucks.

    Speaking fundamentally, with recent colossal multi-$billion commercial failures

    in both ag chemicals (tree-killing DuPont Imprelis), and seeds (faltering GM seed trait DuPont OptimumGAP), there is little on the

    horizon which would alter DuPont's outstandingly mediocre trajectory. ...funfun..

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