The Dow's Biggest Losers Last Week

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

Mar 1, 2014 at 5:00PM
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All three of the major U.S. indexes posted solid gains this past week. The Dow Jones Industrial Average (DJINDICES:^DJI) increased by 218 points, or 1.35%, while the S&P 500 gained 23 points, or 1.26%, and the Nasdaq climbed 44 points, or 1.04%. A number of economic reports helped push them along, although not all of the reports were positive. For more on those reports and how they affect the Dow on an ongoing basis, click here.

Before we get to the Dow's biggest losers of the week, let's look at its top performer, Home Depot (NYSE:HD), up 5.51%. Tuesday's earnings results showed a slight beat on earnings ($0.73, versus expectations of $0.71) and a slight miss on miss on sales ($17.7 billion, versus $17.92 billion). Guidance for both metrics also came up just a little short, but management did announce a 21% dividend increase to $0.47 per quarter. It was overall a great quarter for investors, but with a possible housing slowdown in the works, Home Depot will need to be vigilant about keeping its numbers strong during the first quarter.  

Last week's big losers
JPMorgan Chase
(NYSE:JPM), down 1.37%, was the third worst performer on the Dow. The bulk of that decline came early in the week, after management lowered its full-year profit targets, said branch growth is rapidly slowing, and announced plans to cut 2,000 jobs from its mortgage banking unit. Expenses are expected to grow by 1% in the consumer and business banking units during the coming year, too. This company could be in for a rough 2014, and a misstep along the way could really hurt profits.  

In second place this week was Cisco (NASDAQ:CSCO), down 1.49% after selling $8 billion worth of debt, one of the largest bond offerings in the tech industry's history. In some respects the move makes sense -- the interest rate is a reasonable 3.6%, and much of the $47 billion on Cisco's balance sheet is overseas, meaning stiff repatriation taxes if it brought the cash home. The downside is that the new debt holds the potential to hurt Cisco's ability to grow and adapt to the changing market landscape.  

Finally, the worst Dow stock of the week was AT&T (NYSE:T), which suffered a steady decline all week and ended the week down 2.65%. What's up? WhatsApp, for one. Facebook CEO Mark Zuckerberg told the Mobile World Congress that WhatsApp will add free voice calls, in addition to keeping its $0.99 annual fee to send unlimited texts all over the world. He also said the company doesn't plan to increase prices or start new revenue streams for its newly acquired service anytime soon. WhatsApp already draws in a million new customers a day, and at that rate it's eventually going to eat into the market share of the four big U.S. telecoms. AT&T's performance this week was probably a reflection of what investors see for the future of the telecom industry.  

The other Dow losers this week:

  • Caterpillar, down 0.54%
  • McDonald's, down 1.34%

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Matt Thalman owns shares of Home Depot and JPMorgan Chase. The Motley Fool recommends Cisco Systems, Facebook, Home Depot, and McDonald's and owns shares of Facebook, JPMorgan Chase and McDonald's. 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.

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