Why DuPont, Boeing, and ExxonMobil Led the Dow Lower This Week

The Dow Jones Industrials (DJINDICES: ^DJI  ) lost just under a hundred points this week, dropping from the record levels where it started the week as investors worried about the possibility that the coming second-quarter earnings season won't go as well as companies hope. Despite relatively benign news during the week, DuPont (NYSE: DD  ) , Boeing (NYSE: BA  ) , and ExxonMobil (NYSE: XOM  ) posted the worst losses among Dow stocks over the past five trading sessions.

Source: DuPont.

DuPont dropped more than 4%, with nearly all of the losses coming on Friday after the chemical and agricultural-productivity company issued a dire earnings warning. Blaming an unexpected drop in demand for corn as farmers gravitated toward planting more soybeans, DuPont said that its earnings per share for the full year would come in $0.20 to $0.35 lower than anticipated, with a new range of $4 to $4.10 per share falling well short of where most shareholders expected to see the chemical company's results. Given the extent of the decline, investors are clearly worried that this is more than a one-time event, yet if DuPont can avoid duplicating the mistake next year, then the damage could be far less in the long run than today's share-price plunge would suggest.

Source: Boeing.

Boeing fell almost 3%, with declines coming steadily throughout the first part of the week. Most of the discussion about Boeing this week came in connection with the coming debate on reauthorization of the U.S. Export-Import Bank, which provides funding to foreign nations seeking to make major purchases of high-ticket items like aircraft. Boeing has historically benefited a great deal from the existence of the Export-Import Bank, and if the entity doesn't get reauthorization from Congress, then it could potentially cost the aircraft manufacturer more than $10 billion in sales, assuming would-be buyers can't find financing elsewhere. Commercial customers have largely been able to support Boeing's stellar growth recently, but nevertheless, losing the Export-Import Bank would be a sizable blow to Boeing's future prospects.

ExxonMobil declined 2.5% on an eventful week in the energy industry. News that the U.S. government had opened up export of crude oil turned out to be somewhat overstated, with the specific authorization allowing just two companies to send a limited amount of processed energy products overseas. Nevertheless, refinery stocks plunged across the board, and given the importance of Exxon's downstream operations as part of its overall business, the Dow energy stock felt the negative impact as well. At this point, the week's refining-led declines seem overblown, but it remains to be seen how the U.S. will react in the future to further attempts to open up crude-oil trade to international buyers.

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  • Report this Comment On June 28, 2014, at 9:38 PM, funfundvierzig wrote:

    DuPont's Duplicitous Management and their PR hucksters have been trying for some time to pass off DuPont as the world's "leading" agricultural powerhouse. Commercial reality is strikingly different.

    DuPont is a distant second to Monsanto in seed biotechnology, And in the sales of ag chemicals/ crop protection, DuPont is in a lowly sixth place behind the world-leader, Syngenta , and behind Bayer, BASF, Dow Chemical and Monsanto.

    To see this shrinking and weakened conglomerate for what it is, investors must blow away the cotton candy constantly foaming out of the giant PR machine in Fortress Wilmington, in the dwarf state of Delaware.


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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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