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

Caterpillar dips, while PMI growth slows in both the U.S. and China on a downer opening to the market year

Jan 2, 2014 at 2:34PM

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.

The best pick for your money in 2014
Stocks aren't having the best day today, but the market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information