The sell-off that began last week across American markets is rolling on, reversing nearly all of the gains posted during a four-day rally that began at the end of March. The Dow Jones Industrial Average (DJINDICES:^DJI) was down 0.6% heading into lunch, and its value of 16,325 points was in line with its close on March 28, the first day of its now-undone rally. The S&P 500's (SNPINDEX:^GSPC) 0.5% drop to 1,855 points also returned it to its closing value on March 28.
Both indices have had a difficult time going anywhere this year -- the Dow has yet to clear the 16,576-point close from the last day of 2013, and the S&P is less than 1 percentage point higher than the 1,848-point close it recorded on Dec. 31.
The Dow's big gainer today, Intel (NASDAQ:INTC), was up 2% on the heels of its second upgrade in less than a week. Last Thursday, Piper Jaffray upgraded the chipmaker to buy and placed a new $30 price target on its shares. This morning, Pacific Crest followed suit by upgrading Intel shares to buy as well, with a $31 price target. That's another 16% upside from today's pop; since most analysts covering the stock still rate it as a hold, there could be more upside ahead if more minds begin changing on Wall Street.
Intel is also the megacap with the largest gain on the S&P 500 this morning, but its weight on both indices isn't nearly enough to counteract the drag produced by Visa (NYSE:V) and Pfizer (NYSE:PFE), which are the worst-performing megacaps on the S&P and the worst-performing Dow stocks on this otherwise uneventful day. Only 135 or so of the S&P's 500 stocks were in positive territory heading into lunchtime, but only one of the index's 500 components have suffered a decline in excess of 4%. This loss, in Genworth Financial, doesn't have quite the same impact on the Dow as Visa's 2.7% drop.
The credit card issuer with the $130 billion market cap has been sliding all morning as investors digest a spate of bad news, including fellow Dow component Wal-Mart's intent to sue over "swipe fees" and the megaretailer's move to switch its branded cards from one rival card network to the other, which is a major missed opportunity for Visa. As the highest-priced stock on the Dow, Visa's woes have roughly eight times the impact on the index's movement than the far-lower-priced Intel's positive momentum.
Pfizer, experiencing a 2.7% loss as of noon, has barely more impact on the Dow than Intel due to its $31 share price -- but its $200 billion market cap gives it greater weight on the market-cap-weighted S&P than either Visa or Intel, which are both valued at about $130 billion. The world's largest drugmaker is down in the dumps today despite positive news out of phase 2 trials of its breast-cancer drug palbociclib. Apparently, "good news" isn't good enough these days for investors who seem to have become more accustomed to the manic fluctuations of do-or-die small-cap biotechs than the slow-and-steady progress of megacap pharmaceutical companies. Pfizer has done a great job boosting its bottom line over the past three years, but sales are down nearly 20% from 2010; and if the company can't come up with a few more blockbusters, it could lose its positive earnings-per-share momentum soon as well.
3 stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love.
The Motley Fool recommends Intel and Visa. The Motley Fool owns shares of Intel and 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.