Dow Craters 166 Points but Potbelly Refuses to Fall

Home Depot leads the blue chips lower, while MGM Resorts ends as one of the worst in the stock market today.

Apr 7, 2014 at 6:35PM

The three major U.S. indices and all 10 sectors ended in the dumps on Monday, as the stock market lost ground for a third straight session. Though seven in 10 stocks lost ground, today's sell-off was especially rough for high-growth names: only one of the S&P's 20 hottest performers of the last year eked out gains Monday. With bears threatening to come out of hibernation in the early days of spring, the Dow Jones Industrial Average (DJINDICES:^DJI) lost 166 points, or 1%, to end at 16,245. 

Home Depot (NYSE:HD) finished as one of the day's 23 blue-chip laggards, losing 2% by day's end. Remember: high-flying stocks took the brunt of the impact from today's sell-off, and in the last three years Home Depot stock has doubled, performing nearly three times as well as the Dow itself. Shares are somewhat insulated from severe declines with $15 billion cash in the bank and a sustainable, 2.4% dividend to its name. Consider the fact that real estate is still on the up-and-up and homeowners are remodel-happy, and Home Depot still looks like a good bet. 

While investors have been diligently bidding Home Depot's stock to double what it was three years ago, shareholders of MGM Resorts International (NYSE:MGM) weren't as patient -- its stock has doubled in the last year alone. But the quick to rise are too often quick to fall, and Monday's risk-shedding party sent MGM stock plunging 5.9%. The rationale behind today's slump is almost laughable from the outside: gambling revenue in Macau over a seven-day span was disappointing, mostly because of lousy weather. A bum week of sales should hardly mean an $11 billion gambling mainstay is suddenly 6% less valuable, and if shares are prone to fall off a cliff every time the weather isn't predictable, that shows you just how fragile MGM stock can be.

Lastly, shares of the fast-casual sandwich chain Potbelly (NASDAQ:PBPB) added 1% today, as it bucked Monday's downtrend to finish in the black. It's one of the few times in the stock's short history as a public company that Potbelly shares have done anything other helplessly slump. The stock's heyday was way back in October of 2013, when shares went public at $14 a share, then broke $30 a share by the end of the day. Ever since then shares have been pitifully tumbling back toward their original levels. Frankly, since Potbelly's is still unprofitable and growing its sales by less than 10% annually as of 2013, I'm more excited by their sandwiches than their stock.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Home Depot. 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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