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Why McDonald's and Wal-Mart Should Worry Dow Jones Investors

http://www.fool.com/investing/general/2014/02/10/why-mcdonalds-and-wal-mart-should-worry-dow-jones.aspx

Dan Caplinger
February 10, 2014

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrials (INDEX: ^DJI) started the week on an uncertain note, falling 42 points as of 11 a.m. EST to give back some of last week's hard-fought gains. Many investors are focusing on the testimony that new Federal Reserve Chairwoman Janet Yellen will give to Congress tomorrow and Thursday, looking hard for clues about whether recent weak economic data could prompt a change in the expected course of policy at the central bank. But of even greater concern to investors should be the fact that stalwart stocks McDonald's (NYSE: MCD) and Wal-Mart (NYSE: WMT) aren't serving their traditional function of protecting Dow investors from losses, as both are down more than 1% again today after fairly dramatic declines recently.

The latest news on McDonald's monthly same-store sales figures shows the great divide between conditions in the fast-food giant's international and domestic businesses. Overall, comps rose 1.2% in January, with a 2% gain in the key European region and an even faster 5.4% for the Asia-Pacific region, which includes China. But U.S. same-store sales fell at double the pace investors had expected, dropping 3.3%. The unusually cold weather in January might have been part of the cause. However