Coke's Not the Only Stock Flattening the Dow Today

The Dow's actually doing quite well given sharp declines from throughout the average. Find out why many stocks are falling flat today.

Feb 18, 2014 at 11:00AM

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 a long holiday weekend, traders came into a new week looking a bit groggy, with the Dow Jones Industrials (DJINDICES:^DJI) down 17 points as of 11 a.m. EST. Yet perhaps the most impressive thing about the Dow's performance is that it withstood pressure from different sources. First, Coca-Cola's (NYSE:KO) earnings this morning didn't provoke a fizzy response from the stock market. But even beyond the beverage giant's results, sizable drops for consumer giant Procter & Gamble (NYSE:PG), as well as telecom rivals Verizon (NYSE:VZ) and AT&T (NYSE:T), weighed on the Dow -- even if they didn't create a big loss for the overall average Tuesday morning.

Coca-Cola's drop of nearly 4% came in the aftermath of its fourth-quarter earnings report. Coca-Cola has struggled mightily for several quarters now, and today's report was no exception, as sales fell by 4% on volume growth of just 1%, leading to an 8% drop in profit and prompting the company to take measures to reduce costs further. Even though Coca-Cola's overall market share improved, investors weren't pleased with the ongoing difficulty that the beverage giant is having trying to stoke its growth fires.

Procter & Gamble fell nearly 2%, with investors likely looking at the signs from Coca-Cola's report and applying them to the consumer products company's prospects. Like Coca-Cola, P&G relies on international revenue to a large extent, leaving it vulnerable to the same currency-related issues that contributed to Coke's falling results. Moreover, the two companies also share relatively similar valuations, which at current levels don't allow for much margin of error for either stock.

Competition among companies has also gotten fiercer in many industries, with wireless telecom being the most notable example recently. Both AT&T and Verizon fell more than 1% this morning as the companies continue to wage war through pricing discounts and other promotional activity. The rivals have made it clear that they're laser-focused on the U.S. market right now, with AT&T saying late last month that it wouldn't seek to buy the remainder of Vodafone after Verizon bought out Vodafone's share of their Verizon Wireless joint venture. Yet if lower-priced plans don't bring in enough new customers to offset falling revenue, the moves could simply cost Verizon and AT&T money. If that happens, then even a high dividend yield wouldn't be enough to keep investors satisfied for the long run.

Get smart about AT&T and Verizon
Investors love Verizon and AT&T for their dividends, and of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and Procter & Gamble. The Motley Fool owns shares of Coca-Cola. 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.

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