Six months into the year, the Dow Jones Industrials (INDEX: ^DJI) have seen their share of ups and downs. As I described in more detail earlier today, the Dow was up huge in the first quarter but then fell sharply, at one point actually trading down for the year before rebounding to post a gain of slightly more than 5% for the first half of 2012.

Still, even when the broader market is up strongly, you can count on having some stocks miss the party entirely. Let's look at the losers for the year so far to see what's going on to explain their bad performance and what they need to do to rebound in the second half of the year.

Hewlett-Packard (NYSE: HPQ) -- down 21.1%
HP's woes are legion, and they're quite well known. After a series of strategic missteps and short tenures in its executive suite, HP has turned to Meg Whitman to get things shaped up at the technology company. So far, investors haven't gotten the lightning-fast results they apparently expected, and they've responded by punishing the stock further even after terrible returns in 2010 and 2011.

Whitman's decision to focus on higher-margin services rather than commodity-like hardware certainly resonates in the IT world. The question is whether investors will be patient enough to give Whitman a chance to execute her entire long-term strategy. After such huge losses, that's a hard thing to ask shareholders to manage. HP has been able to overcome adversity before, but the speed at which technology markets are changing makes it especially difficult right now for HP to focus on what it needs to do to move forward on a more even footing.

McDonald's (NYSE: MCD) -- down 10.4%
The problems in Europe have exposed the dangers of international investing. But Europe doesn't just have an impact on European companies; it can also crush U.S. companies that do a lot of business there. For McDonald's, which gets 40% of its revenue from Europe, the combination of a strong dollar and instability in European markets hasn't helped the company.

After a three-year rise that had shares double from their 2009 lows, McDonald's arguably was due for a break. Although the 10% correction in its stock hasn't brought it down to obvious bargain prices, McDonald's appears a lot more promising a pick now. If shares fall a bit further, look for value investors to start stepping in more aggressively.

Procter & Gamble (NYSE: PG) -- down 6.7%
Consumer staples are supposed to do well in unimpressive market environments even as they lag during bull moves. But P&G has faced unusual challenges lately, and there's little sign that they'll stop anytime soon.

Between higher prices for raw materials and a sluggish economic environment that discourages premium-brand purchases, P&G has seen falling earnings and scant rises in revenue. Yet as Fool contributor Rich Smith noted just last week, P&G's valuation remains rich even after its share-price declines so far this year. P&G needs consumers to catch up if it expects to avoid further headwinds to its stock.

Caterpillar (NYSE: CAT) -- down 5.5%
Compared with some of the Dow's other losing stocks, it's not hard to understand Caterpillar's decline. After rising sharply on optimism about the world economy earlier in the year, the stock gave back all those gains and then some when signs of weakness in Asia and Europe started raising questions about whether the U.S. would be able to buck a global recession.

Caterpillar has counted on strength both in foreign markets and domestically to support its growth in recent years. But even though its move to build its presence in the mining equipment industry through its acquisition of Bucyrus helped open up new avenues for growth, it also left Caterpillar vulnerable to a downturn in that sector as well. Going forward, Caterpillar should recover as soon as stability and growth return to mining and overall construction activity.

Don't let the short term get you down
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Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter, @DanCaplinger. The Motley Fool owns shares of McDonald's. Motley Fool newsletter services have recommended buying shares of McDonald's and Procter & Gamble. 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 Fool has a disclosure policy.