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Last Week's Worst Performing Dow Components

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This past week was one and a half days shorter than a normal trading week, but it was still jam-packed with economic reports. Monday gave us a report on housing construction spending, which rose 0.5% in May. Tuesday brought auto industry sales numbers and U.S. factory orders, which were both higher for the period. On Wednesday it was the trade report, which showed a big jump in the trade deficit in May, and we also got a better-than-expected ADP jobs report. Of course, Thursday was quiet on Wall Street but perhaps noisy in your neighborhood as the sun went down. Finally, Friday brought the Labor Department's jobs report, which came in with similar fashion as the ADP report, beating estimates and wowing investors.

And, after all that, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) managed to move higher by 226.24 points, or 1.51%, and now sits at 15,135.84. The other major indexes also rose higher this past week. The S&P 500 increased by 1.59%, while the Nasdaq gained 2.23%. But even though in general the markets moved higher, we can still find a few stocks within the Dow that fell into the red for the week.

Before we hit the Dow losers, let's look at this week's best performing component: United Technologies (NYSE: UTX  ) . Shares of the building systems and aerospace company rose 3.86% during the three and a half days of trading. The company is well positioned to benefit from a recovering economy and strengthening construction industry, so a number of the economic data points released this week played right into United Tech's hand. Additionally, once the company's Goodrich division and aerospace units pick up steam, the sky may be the limit for this stock.  

The big losers
Earth-moving company Caterpillar (NYSE: CAT  ) lost 0.42% of its value over the past few trading days, as precious metals and other natural resources had a terrible Friday. On the last day of the week alone, gold lost 3.13%, sliver declined by 4.89%, and platinum and copper slid 1.51% and 3.45% respectively. Caterpillar is a big player in mining equipment sales, and when the commodity prices of the resources which are mined fall, demand for heavy machinery usually will follow suit.  

Shares of Intel (NASDAQ: INTC  ) declined by 0.7% last week. There was very little negative news about the company this past week, but Intel's new CEO, Brian Krzanich, did make some comments two Fridays ago, which may have moved the stock slightly lower. Krzanich said that Intel has now made a concerted effort to move into the mobile chip market. While on the surface this sounds like kind of comment that should send the stock higher, after a deeper look I believe the comment means that until just recently Intel didn't take the mobile-chip makers and their specialized chips serious. If so, that would indicate that previous management truly missed the boat on what is now a massive market, which is actually eating away at the traditional PC chips market.  

Finally, Microsoft (NASDAQ: MSFT  ) became the Dow's worst performing component this past week, as shares lost 0.95% of their value. The technology company lost one of its unit executives, which is the likely cause behind the declining share price. Don Mattrick, head of Microsoft's Xbox division, announced that he was leaving Mr. Softy, after having been with the company since 2007, to take the CEO role at the social-gaming company Zynga. This is a major win for the small gaming company and a major blow to Microsoft, as Mattrick led the unit into profitability and helped it become one of Microsoft's best-performing units.  

The other Dow losers this week:
(For more information on why shares of the other losers were lower this past week, click on the link for the company.)

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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.

  • Report this Comment On July 06, 2013, at 10:36 PM, prginww wrote:

    Amazingly similar to your July 4th article. All of these stocks were affected by the Russell reconstitution.

    FOR example, because of FB and several other companies joining the index, many of the stocks you are talking about were under selling pressure after the speculation shorts cleared out.

    INTC, Russell related indices required 7.6 million shares to be sold by the reconstitution.

    If you want to understand the impact better, check out this analysis of the impact.

    PAGE 6 for the Intel example.

    2013 Russell Reconstitution:

    Highlights and Observations

    Every year, the Russell Reconstitution

    provides the investment community

    with surprises, opportunities and risks.

    Friday, June 28th, all the Russell indices were reconstituted for the next year. Somewhere near $4 trillion worldwide is benchmarked against the Russell and there are $100 billion worth of ETF that had to rebalance on Friday and Monday. Most of the movement on Friday and Monday was the passive reconstitution, speculation trades and unwinding.

    Your over analysis of "what was said" and "by who" had less to do with the trading the last several days than the flow of Russell money.

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Related Tickers

9/28/2016 5:27 PM
^DJI $18339.24 Up +110.94 +0.61%
CAT $86.59 Up +3.71 +4.48%
Caterpillar CAPS Rating: ***
INTC $37.44 Up +0.26 +0.70%
Intel CAPS Rating: ****
MSFT $58.03 Up +0.08 +0.14%
Microsoft CAPS Rating: ****
UTX $102.35 Down +0.00 +0.00%
United Technologie… CAPS Rating: ****