Last Week's Biggest Dow Losers

An in-depth look at what caused a few stocks to fall.

Jan 25, 2014 at 5:00PM

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.

In a holiday-shortened week, the Nasdaq suffered its worst showing since last June, while the S&P 500 put in its worst showing since May 2012, and the Dow Jones Industrial Average (DJINDICES:^DJI) hadn't seen such a bad week since November 2011. The Dow lost 579.45 points, or 3.52%, as the S&P 500 fell 48.41 points, or 2.63%, and the Nasdaq slid 69.41 points, or 1.65%. The bulk of the declines came on Thursday and Friday, with Thursday's news that China was experiencing its first manufacturing slowdown in nearly six months causing investors to pull funds from emerging markets. That just made a bad week worse.

But it wasn't all bad news in the markets. Even as 28 of the Dow's 30 components fell, Microsoft (NASDAQ:MSFT) managed to rise 1.15%, making it the index's biggest winner of the week. Investors reacted positively to the company's quarterly earnings, which came out Thursday after the closing bell. Sales of $24.5 billion and earnings per share of $0.78 beat analysts' estimates, as the company's Xbox unit really delivered: Microsoft moved a combined 7.4 million Xbox One and 360 units, compared with 5.9 million the previous year. The Surface tablet finally seems to be catching on, too, as the company doubled its sales within that unit to $893 million. Investors were no doubt relieved to see Microsoft can keep growing its revenue, and the positive trend looks as though it should continue.  

Last week's big losers
The last time the Dow's biggest loser for the week lost more than 5% was the last week of November, when Cisco lost 5.8%. But this past week, even the third-place loser lost more than that, as shares of Travelers (NYSE:TRV) fell 5.91%. The company reported solid earnings early in the week, with net income more than tripling from a year ago to hit $2.70 per share as the company's catastrophe payout fell from more than $1 billion a year ago to just $53 million this past quarter. But investors were concerned with the company's deteriorating margins this past quarter, and shares declined for the remainder of the week.  

The second worst performing Dow component was General Electric (NYSE:GE). The bulk of its 6.13% drop for the week came on Friday, as investors began to express concern for the overall health of the world economy. GE not only operates all around the world but also needs large and expensive infrastructure projects to grow revenue, so for GE, a slowing world economy equates to a coming revenue slowdown. Still, investors should keep in mind that the economic report out of China is the only recent indication we have that major economies might be slowing. In other words, a slowdown is just speculation at this point. GE investors would be wise to sit tight and wait another few months to see how things play out.

Finally, this past week's biggest Dow loser was DuPont (NYSE:DD), down 6.32%. DuPont's decline wasn't due to a company announcement, a ratings downgrade, or a big contract signed by a competitor. As with GE, it appeared to be investor fear over the global economy. Over the past few years, as DuPont has sold off parts of its business and increased its focus on other areas, it has positioned itself to be more dependent on positive economic conditions. The combined news that China may be slowing, that the Federal Reserve may taper more of its asset purchase program, and that emerging markets are weakening sent DuPont's shares tumbling.  

The other Dow losers this week:

  • 3M, down 5.16%
  • American Express, down 4.41%
  • AT&T, down 0.83%
  • Boeing, down 2.71%
  • Caterpillar, down 5.76%
  • Chevron, down 2.51%
  • Cisco, down 2.37%
  • ExxonMobil, down 4.34%
  • Goldman Sachs, down 4.9%
  • Home Depot, down 2.27%
  • Intel, down 4.02%
  • IBM, down 5.49%
  • Johnson & Johnson, down 4.68%
  • JPMorgan Chase, down 5.19%
  • McDonald's, down 0.52%
  • Nike, down 2.49%
  • Pfizer, down 3.21%
  • Procter & Gamble, down 0.87%
  • Coca-Cola, down 1.12%
  • United Technologies, down 2.11%
  • UnitedHealth, down 1.26%
  • Verizon, down 1.48%
  • Visa, down 4.7%
  • Wal-Mart, down 2.32%
  • Walt Disney, down 1.87%

Don't gamble with your future
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

 

Fool contributor Matt Thalman owns shares of Home Depot, Intel, Johnson & Johnson, JPMorgan Chase, Microsoft, and Walt Disney. The Motley Fool recommends 3M, American Express, Chevron, Cisco Systems, Coca-Cola, Goldman Sachs, Home Depot, Intel, Johnson & Johnson, McDonald's, Nike, Procter & Gamble, UnitedHealth Group, Visa, and Walt Disney and owns shares of Coca-Cola, General Electric, Intel, IBM, Johnson & Johnson, JPMorgan Chase, McDonald's, Microsoft, Nike, Visa, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers