Why Boeing, Home Depot, and Wal-Mart Pulled the Dow Down Last Week

The Dow Jones Industrials (DJINDICES: ^DJI  ) did something they haven't done in a while this week: post two triple-digit losing sessions on the way to a 150-point loss on the week. Even though the decline represents less than a 1% pullback on the Dow, it's still the worst weekly performance the Dow has had since early April, showing just how impressive the stock market's bull run has been during the second quarter. Among the biggest decliners this week were Boeing (NYSE: BA  ) , Home Depot (NYSE: HD  ) , and Wal-Mart (NYSE: WMT  ) .


Source: Boeing.

Boeing fell more than 4% as the aerospace giant faced the twin prospects of a slower global economy and industry-specific headwinds as well. Boeing has benefited greatly from the rise of the airline industry, which has emerged from decades of weak performance and consistent bouts of bankruptcy filings to become immensely profitable. But even high-flying airline stocks have started to show some weakness as the bull market ages, and the pace of new orders has been so strong in recent years that it'd be almost impossible for Boeing to keep it up for the foreseeable future. Boeing's long-term prospects still look promising, but they're contingent on the airline industry figuring out how to perpetuate its recent success rather than falling back into their old money-losing patterns.

Home Depot dropped 3% as investors weighed the potential impact of economic sluggishness on the housing market. Interest rates have been stubbornly low so far in 2014, and that has helped keep mortgage rates down and make housing more affordable for would-be homebuyers. That in turn should help support Home Depot's growth, especially in light of pent-up demand from shoppers who had to delay gardening and home-improvement projects due to the long winter. Yet nervousness that rates will eventually have to rise and that the housing market could finally start to see some weakness creep in weighed on the stock this week, and investors will simply have to wait for the home-improvement retailer's next earnings report to see if Home Depot can keep bucking the trend and finding new ways to grow.

Wal-Mart gave up about 2.5%, with one of the factors being possible consolidation in the deep-discount retail space. Carl Icahn targeted a prominent dollar-store chain by taking a 9% in the company, seeing the potential for dollar stores to challenge traditional discount department stores like Wal-Mart. That strategy has some merit, especially in light of the challenges that Wal-Mart has had in an economic environment that should actually play to the retailer's strengths. If Wal-Mart keeps facing challenges from both sides of the income spectrum, then it could find itself squeezed out, and the company needs its efforts on the e-commerce front to bear fruit in order to fend off competition from that angle as well.

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