Last Week’s Worst-Performing Dow Components

For a week in which eight of the Dow Jones Industrial Average's (DJINDICES: ^DJI  ) 30 components reported earnings, the index ended the week with a lot less excitement than most would have predicted. The Dow changed only 0.09% over the past five trading sessions, with the blue-chip average rising 15 points last week to end the week at 15,558, while the two other major indexes ended the week on uneven footing. The S&P 500 lost 0.02%, while the Nasdaq rose 0.71%.

Before we hit the Dow losers, let's look at this week's best-performing component. After falling slightly more than 4% two weeks ago, Hewlett-Packard (NYSE: HPQ  ) rose 3.38% this past week, even after a 0.95% drop on Friday. The continued drama involving Dell may have helped push the stock higher, as a higher buyout offer for the company may indicate that HP deserves an additionally higher market cap. Furthermore, the more negative attention Dell attracts, the less likely consumers are going to want to purchase a Dell, which could also mean higher sales for HP. 

The big losers
Caterpillar
(NYSE: CAT  ) was the worst Dow component of the week, down 4.19% after the company reported earnings on Wednesday and missed expectations. Earnings per share came in at $1.45, down 43% from $2.54 from the second quarter last year and much worse than the $1.69 Wall Street wanted to see. Revenue came in at $14.6 billion, which was also lower than the $15.1 billion analysts wanted to see. Furthermore, the company cut its full-year forecast and told investors it will begin cutting costs as a way to deal with lower sales.  

With mixed results being reported on the housing front this past week, shares of Home Depot (NYSE: HD  ) lost 1.89%. On Monday, the National Association of Realtors reported that existing-home sales declined by 1.2% in June when compared with May and that the annualized sales figure fell to 5.08 million. Economists had expected the annual sales number to hit 5.28 million in June. On Tuesday, the Federal Housing Agency reported that the home-price index rose by 0.7% in May compared with April's numbers. In addition, on a year-over-year basis, housing prices are up 7.3%. These two reports separately may not look bad, but with housing prices up in May and sales declining in June, we may be hitting the point where people are no longer able to afford a new home, which would hurt the industry and Home Depot moving forward.

McDonald's (NYSE: MCD  ) lost 2.23% this past week, after the company announced earnings Monday morning. The fast-food leader missed Wall Street's expected earnings per share by $0.02, while same-store sales growth was only 1% during the quarter. That's less than GDP growth and a possible sign that McDonald's is weakening. In addition, CEO Don Thompson told analysts that based on recent sales results, the remainder of the year will be a challenge. Poor sales growth, an earnings miss, and a warning that things may get bad as we move toward the end of the year are all things investors don't want to hear. So it may be a rough year for McDonald's shareholders for the last few months of 2013, but at least the company's 3.1% dividend yield should help long term investor's ride out the bad weather. 

The other Dow losers this week:

(For more information on why shares of the other losers fell lower this past week, click on the following links.)

More Foolish insight
Tax increases that took effect at the beginning of 2013 affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new special report "How You Can Fight Back Against Higher Taxes," The Motley Fool's tax experts run through what to watch out for in doing your tax planning this year. With its concrete advice on how to cut taxes for decades to come, you won't want to miss out. Click here to get your copy today -- it's absolutely free.


Read/Post Comments (0) | Recommend This Article (14)

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: 2562858, ~/Articles/ArticleHandler.aspx, 8/22/2014 9:59:57 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