Evening Dow Report: Industrials Fall 104 as Johnson & Johnson, Procter & Gamble, and Coca-Cola Drop 2%

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrials (DJINDICES: ^DJI  ) posted its second straight day of triple-digit declines, falling another 104 points Thursday to close at 15,739. Without much in the way of market-moving news, investors seemed to default to their general worries about macroeconomic issues, doubting whether the inevitable reduction in bond-buying activity from the Federal Reserve can happen without some disruption to the stock market. Yet particularly troublesome was the fact that three stocks that most investors see as defensively positioned -- Johnson & Johnson (NYSE: JNJ  ) , Procter & Gamble (NYSE: PG  ) , and Coca-Cola (NYSE: KO  ) -- dropped the most today, with declines of more than 2% each.

Coca-Cola dropped another 2.3% today. Adding to the stock's general woes was a New York Times report that Buffalo Wild Wings would turn to rival PepsiCo (NYSE: PEP  ) for the restaurant chain's beverage business. For Buffalo Wild Wings, the move makes sense, given PepsiCo's connection to the NFL and Major League Baseball and the chicken-wing chain's emphasis on sports in its marketing. But it also shows how PepsiCo can offer advantages over Coca-Cola because of Pepsi's snack business, which gives restaurants the chance to consider new menu options that Coca-Cola can't deliver.

Johnson & Johnson fell 2.1% as the health-care conglomerate faces hefty antitrust fines from European regulators for an agreement to pay generic-drug maker Sandoz to delay releasing a generic version of a painkilling product. J&J's share of the fines amounts to nearly $15 billion, with regulators arguing that the 2005 agreement covering fentanyl in the Netherlands restrained competition and denied cancer patients cheaper access to the drug. J&J is considering an appeal, but the bigger issue at stake is whether such pay-for-delay agreements will generally cause antitrust problems that make them unworkable for pharma companies generally.

Procter & Gamble dropped 2%. In general, the consumer-products giant has performed quite well recently, finally participating in the gains that its rivals have enjoyed for years. Yet as J&J and Coca-Cola are seeing to a certain extent, P&G's share valuation has gotten high enough to raise concerns that its growth prospects might be insufficient to justify further stock appreciation. Even with solid dividend yields, all three of these Dow stocks show signs of decaying confidence that could cause them not to behave the way investors expect -- especially if the stock market does correct from its long bull run.

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