ExxonMobil's Fall Takes Down the Dow

Merck stumbles on a downbeat day for stocks as Exxon tumbles 2.9%

Mar 5, 2014 at 2:31PM
Daily Fool

Stocks have slowed down after yesterday's rally and the Dow Jones Industrial Average (DJINDICES:^DJI) has given back some of those great gains it picked up on Tuesday. As of 2:30 p.m. EST, the Dow was down more than 38 points, with most member stocks falling after disappointing private-sector hiring data dampened investor optimism. ExxonMobil (NYSE:XOM) is the Dow's clear-cut loser today by shedding 2.9%. Let's catch up on what you need to know.

Jobs gains remain elusive
Automatic Data Processing released its February private-sector payroll report today, and the statistics don't add any silver lining to what has been a disappointing winter season for the U.S. economy. According to ADP's report, the private sector added 139,000 total nonfarm jobs in February, disappointing economists heading into the government's own jobs report slated for release on Friday. The 139,000-job gain is far less than the 205,000 private-sector positions added in February 2013, although it's a step up from January's poor result, lending credence to the suspicions that this year's exceptionally poor weather has held back the economy's gains.

Around the Dow, Exxon tumbled after the company projected it would spend 6.4% less on capital efforts this year despite expecting to start up production at 10 new projects in 2014, a record for the company. Exxon predicts capital spending to come in at $39.8 billion this year, with annual average spending of $37 billion between 2015 and 2017.

Investors haven't been too pleased with Exxon's progress as of late. The stock has gained only roughly 8% over the past year, trailing much of the Dow's gains over that time. The company's most recent earnings report in late January failed to build up any optimism; Exxon missed on analyst expectations for its bottom line as earnings per share slumped by 14% year over year. Those 10 projects due to begin his year serve as the beginning of Exxon's plan to kick off new projects in natural gas and oil production in order to drive growth. However, for cautious investors, the Big Oil company will have to perform before this stock sees better days.

Elsewhere on the Dow, Big Pharma's Merck (NYSE:MRK) has had a tough day despite revealing upbeat new data. The health care stock has shed around 0.3% despite the company's developmental dust mite allergy drug MK-8237 hitting all the right notes in a recent phase 2b clinical trial. This isn't Merck's strongest drug in its pipeline by far, but it's nonetheless a victory for investors who have struggled with the company's high research and development spending and failure to produce many strong market contenders. While all eyes turn toward Merck's developmental cancer therapy MK-3475, a potential blockbuster, every strong clinical study performance helps.

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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.

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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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