Please ensure Javascript is enabled for purposes of website accessibility

The Dow's 3 Biggest Losers in the First Quarter

By Dan Caplinger – Apr 8, 2018 at 9:31AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Find out which poor-performing stocks kept losing ground.

The first quarter wasn't pretty for the Dow Jones Industrials (^DJI -1.71%). The average posted a loss for the first time in nine quarters, losing more than 600 points in turbulent trading that marked the return of volatility to the stock market.

Out of the Dow's 30 stocks, 21 lost ground during the first quarter, helping to explain the 2.5% drop in the average. Yet three stocks in particular were the biggest decliners in the Dow during the period, each falling more than 10% and underperforming the overall average dramatically. None of the three names comes as a huge surprise to investors who've followed the Dow lately, but continued woes raise questions about their likelihood of rebounding in the future.

The worst 3 Dow stocks in the first quarter of 2018

Stock

Total Return

General Electric (GE -1.31%)

(22.1%)

Procter & Gamble (PG -1.90%)

(13.1%)

DowDuPont (DD -0.49%)

(10.1%)

Data source: Yahoo! Finance.

Power off for GE

General Electric was by far the worst performer in the Dow in 2017, and many value investors had hoped to see a rebound for the conglomerate at the beginning of this year. Yet that didn't come to pass, as investors failed to see a strong response from GE management in plotting a pathway forward to bounce back from its past challenges.

Investors were already prepared coming into 2018 for several of General Electric's key businesses, including power and oil services, to remain weak. But the quarter's earnings report revealed an unexpected problem in the form of a $6.2 billion after-tax charge because of the conglomerate's portfolio of insurance exposure that it had retained after its divestiture of major financial assets. With ongoing potential issues that the conglomerate is still facing, GE hasn't yet shown signs of stabilizing, let alone clawing its way back to success.

Person throwing a mini-football to the Charmin mascot in front of a semi truck with Charmin marketing on it.

Image source: Procter & Gamble.

P&G plods along

Consumer giants are supposed to be good places for conservative investors to put money during tough markets, and Procter & Gamble's manifold billion-dollar brands have been a stalwart in the consumer products industry for decades. Yet growth has been hard to come by, and P&G's quarterly results during the period were no different, sporting sales gains of just 3% and relatively flat earnings after taking one-time factors into account.

Retaining market share has been a problem for P&G, and a lot depends on what impact activist investor Nelson Peltz has on the company as he takes his spot on its board of directors. Focusing on the consumer giant's most popular products could be a winning strategy for Procter & Gamble, but some believe more dramatic strategic moves could be necessary in order for the stock to behave the way shareholders would like to see.

DowDuPont's chemistry

Finally, DowDuPont also posted significant losses, and of these three stocks, it's the one that's most in limbo at the moment. The company has completed the merger of Dow Chemical and DuPont, but it is now looking forward to its future breakup into three components. One company will be responsible for manufacturing basic chemicals and polymers in the materials science area. A second will hold the merged company's specialty products lines in the aerospace, semiconductor, biosciences, and occupational safety arenas. The last will get the seeds, genomics, and other agricultural assets from Dow and DuPont.

The split-up isn't likely to happen until 2019, which will leave investors in DowDuPont facing an imminent breakup without being able to make forward progress. That's not bad for those who believe in the prospects for all three businesses, but for those who'd prefer to pick one over the others, the waiting will make the stock less attractive.

What's next for the Dow?

Many expect the Dow to bounce back in the rest of 2018, as it has in many past years. To do so, investors would prefer to see better performance from laggards like DowDuPont, Procter & Gamble, and General Electric, as that would indicate shifting conditions that could be more favorable for the stock market as a whole.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

General Electric Company Stock Quote
General Electric Company
GE
$61.91 (-1.31%) $0.82
The Procter & Gamble Company Stock Quote
The Procter & Gamble Company
PG
$126.25 (-1.90%) $-2.45
DuPont de Nemours, Inc. Stock Quote
DuPont de Nemours, Inc.
DD
$50.40 (-0.49%) $0.25
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$28,725.51 (-1.71%) $-500.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
104%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.