Why 3M, Visa, and ExxonMobil Will Move the Dow Tomorrow

Dow components 3M, Visa, and ExxonMobil are all scheduled to report earnings tomorrow morning. What they say about their respective industries could move the Dow sharply.

Jan 29, 2014 at 4:30PM

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) plunged again today, falling nearly 200 points even though investors pretty much got the news they expected with the Federal Reserve's decision to further reduce its bond-buying activity under quantitative easing. Yet even as international and macroeconomic concerns weigh on the Dow, three of its components will report earnings tomorrow morning. What 3M (NYSE:MMM), Visa (NYSE:V), and ExxonMobil (NYSE:XOM) say about their respective results could well set the tone for the Dow both tomorrow and throughout the first part of 2014.

Visa starts things off with its earnings conference call at 8:30 a.m. EST, and since it has traditionally released its results after the market close in the past, it's uncertain when it will issue a press release this time around. 3M will hold a conference call on its results at 9 a.m. EST, with investors expecting its press release around 7:30 a.m. EST. ExxonMobil rounds things by issuing its earnings press release at 8 a.m. EST and following up with an 11 a.m. EST conference call, after releasing

For Visa earnings, investors come into the release with high hopes that the credit card network giant can withstand concerns about international prospects to produce continued strong growth. Even though the data breach debacle at Target threw a wrench into consumer sentiment about using credit and debit cards amid widespread identity theft and fraud, Visa looks to be on track to continue reaping its share of growing demand both domestically and internationally. While its rivals are also working hard to share in the growth of the electronic payments industry, Visa remains the leader in the space and is positioned to remain there for the foreseeable future.

3M earnings, on the other hand, involve more modest revenue growth, as the company known for office supplies and adhesives aims to use its reputation for innovation to drive new product development. Forays into the electronics and solar industries could produce some growth opportunities for 3M, but investors will also be looking at how much of the company's growth comes from recent outside acquisitions compared to internal expansion of existing business divisions.

ExxonMobil earnings could present the biggest challenge of all to the Dow, as the energy giant struggles to keep production levels and total revenue from declining too substantially. Falling oil prices will likely produce lower sales even if Exxon can maintain production, but the bright spot could come from the company's natural gas exposure. With prices for nat gas rising in the U.S., Exxon could finally start to get a payoff from its acquisition of XTO Energy back in 2009.

Finally, note that all three of these stocks have relatively high share prices, giving them a combined weight of 18%. If they all move in concert, these stocks could definitely have a big impact on the Dow's overall performance on Thursday.

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Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends 3M and Visa. The Motley Fool owns shares of Visa. 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.

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