The Dow Jones Industrials (DJINDICES:^DJI) fell 101 points on Wednesday, ending its streak of record-setting closes and reflecting anxiety about whether the stock market overall has come too far too quickly. Even though many investment analysts took a close look at the ongoing underperformance of small-cap stocks compared to the Dow Jones Industrials and other large-cap benchmarks, what's striking about today's drop in the Dow is that so many consumer stocks were among the biggest decliners. Disney (NYSE:DIS) and Home Depot (NYSE:HD) two of the worst offenders, indicating some doubts about whether U.S. consumers will be able to keep up the pace of the economic recovery in the future and keep the Dow Jones Industrials soaring.


For Home Depot, which fell 1.25% today, Wednesday's decline might actually seem out of tune with the tenor of the current market environment. Even as stocks dropped today, the bond market surged, sending interest rates to their lowest levels of 2014. Amid nervousness about the affordability of the housing market, falling rates could actually bolster home-buying activity as they filter through to lower mortgage rates and more affordable monthly payments on home loans. That in turn should help boost Home Depot's sales, as more enthusiastic homeowners often spend money on improvement projects and other sources of revenue for the home-improvement retailer and Dow component. Still, one big question in the housing market is whether non-traditional buyers like investment funds are driving demand, in which case the positive impact for Home Depot could be much less dramatic.


Meanwhile, Disney's 1.4% decline pulled the entertainment giant's shares down after their own recent approach to all-time record levels. A solid earnings report last week helped confirm the optimism that have sent Disney's share-price gains higher over the past couple of weeks, and bullish shareholders expect that between unexpected giga-hit blockbuster Frozen and a strong stable of established movie-franchise favorites should be able to keep Disney's earnings growth at desirable levels for the foreseeable future. With its substantial contribution to the Dow's overall performance lately, Disney has been instrumental in keeping the bull market moving forward.

Overall, it seems like today's drops for the consumer stocks of the Dow Jones Industrials are motivated more by rebalancing and risk management than by fundamental concerns about the companies themselves. Although some challenges face Home Depot and Disney, they've proven to be more than equal to the task on many past occasions, and if they're successful this time around, then today's drops could prove to be minor opportunities for shareholders looking to establish or add to their holdings.

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Dan Caplinger owns shares of Walt Disney. The Motley Fool recommends Home Depot and Walt Disney and owns shares of Walt Disney. 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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