The Dow Starts 2014 With a Whimper Behind DuPont's Drop

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.

After 2013's record-shattering year, investors are experiencing a much more ominous opening to 2014. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has dropped sharply into the red since the first opening bell of the new year, crashing down more than 140 points as of 2:30 p.m. EST. All but a few blue-chip stocks are in the red today, with chemical giant DuPont (NYSE: DD  ) headlining the loser list by falling around 1.9%. Let's catch up on what you need to know as the Dow Jones kicks off 2014.

Manufacturing growth churns higher, but will it last?
There's little news out across the markets today, but investors are feeling jittery nonetheless. There was manufacturing news, as the Institute for Supply Management released its monthly purchasing managers' index for December. The PMI decreased slightly by 0.3 percentage points, down to a reading of 57 from November's year-high 57.3 mark. Still, that's far above the neutral 50 reading that marks neither contraction nor expansion and shows that American manufacturing's comeback through last year continued strongly in its final month.

Despite manufacturing prices, employment, and new orders picking up at a faster rate across the industry in November, big manufacturing stocks are down. Dow member Caterpillar's (NYSE: CAT  ) no exception. The heavy-equipment maker's stock shed about 0.9% today, continuing the sluggish ride seen in 2013, when it ranked as one of the five worst Dow stocks by showing low single-digit percentage growth.

Can Caterpillar turn it around? That'll depend heavily on both the U.S. economic recovery churning on and overseas growth, which didn't encourage investors today. China's own purchasing managers' index fell from 51.4 in November to 51 in December. The world's No. 2 economy will need to maintain its sustainable growth targets for top manufacturers to benefit. Caterpillar's Asia-Pacific sales took a big blow in the company's most recent quarter, with its power systems branch in particular seeing sales in the up-and-coming region fall by a painful 63% -- far more drastic a hit than the 28% drop seen in the unit's sales in North America, its top market.

DuPont's down today on a similar lack of company-specific news; unlike Caterpillar, this stock surged to a great 2013. The stock ranked as one of the Dow's top 10 performers over the past year with roughly 50% growth, and the company's agricultural unit looks to power DuPont to big gains again in the new year. With seed sales up 11% during the first nine months of 2013 and total agricultural sales up 9% year-over-year during that time, DuPont investors need to hope for another good season from this top unit.

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Read/Post Comments (10) | Recommend This Article (3)

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  • Report this Comment On January 02, 2014, at 7:49 PM, funfundvierzig wrote:

    It is not surprising that the stock of the continually shrinking DuPont conglomerate might also begin to shrink. DuPont has been dramatically shrinking for the entire 21st century to date, with more diminution expected with a spin-off of Teflon, TIO2, acids, refrigerants, and other chemicals.

    What is left? The assorted businesses in DuPont AG & NUT are pronounced laggards to Monsanto in seeds, to Syngenta in crop protection, to Novozymes in food additives and enzymes, and finally to Scotts MIRACLE-GRO in retail garden and lawn products. Playing second fiddle on the world stage does not excite many investors. ...funfun..

  • Report this Comment On March 24, 2014, at 5:47 PM, stevebry56 wrote:

    DuPont has been revamping its operations and is gradually becoming a fast-growth, high-margin company, here is why you should take a position in the stock.

  • Report this Comment On March 24, 2014, at 5:48 PM, mikewatson021 wrote:

    I believe DuPont has little growth opportunity in future

  • Report this Comment On March 24, 2014, at 5:49 PM, stevebry56 wrote:

    Well since last one year the company’s shares have gone up almost 34%, and on plus sight all the analysts are bullish about the company’s future performance.

  • Report this Comment On March 24, 2014, at 5:50 PM, mikewatson021 wrote:

    Then you suggest its buy stock ?

  • Report this Comment On March 24, 2014, at 5:54 PM, stevebry56 wrote:

    I don’t completely suggest you should buy, but considering the fact that it has better potential for future then I would say you might get better returns if you invest.

  • Report this Comment On March 24, 2014, at 5:57 PM, mikewatson021 wrote:

    Could you give me some info on shareholders return in past years ?

  • Report this Comment On March 24, 2014, at 5:59 PM, stevebry56 wrote:

    The dividend investors and the those investors who seek capital gains have benefited from DuPont in past years, e.g. in FY13 DuPont increased 4.65% in dividends,

    http://goo.gl/lNavbZ

  • Report this Comment On March 24, 2014, at 6:01 PM, mikewatson021 wrote:

    But DuPont pays out only 34% of its income in dividends how you propose the DuPont a good dividend company ?

  • Report this Comment On March 24, 2014, at 6:04 PM, stevebry56 wrote:

    I know it only pays 34% of its income in dividends, but the analysts expect the dividends increase in future as company wants to gain the investors’ confidence.

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