Ben Bernanke keeps giving investors the cold shoulder, and unfortunately the markets don't take rejection well. The Dow Jones Industrial Average (INDEX: ^DJI) dropped 49 points or 0.38%, while the Nasdaq fell 0.49%. The S&P500 actually managed to nearly close flat for the day, and all three indexes fought back from their late-session lows.
The Federal Reserve's latest meeting minutes detailed increasing concern, but still no real action to boost the markets or the economy, or to solve an unemployment problem that the Fed doesn't see getting any better by the end of the year. Apparently, policymakers are waiting for Europe to collapse or the U.S. to drive off the fiscal cliff to fire off their remaining dry powder, instead of trying to strengthen the economy now to potentially absorb those blows.
That said, let's take a closer look at the Dow's three worst performers and what dragged them down.
|
Index |
Daily Performance |
YTD Performance |
Closing Share Price |
|---|---|---|---|
| Boeing (NYSE: BA) | (2.32%) | (1.35%) | $71.52 |
| United Technologies (NYSE: UTX) | (2.21%) | 0.40% | $72.51 |
| Microsoft (Nasdaq: MSFT) | (1.48%) | 14.36% | $29.30 |
Source: Yahoo! Finance.
General weakness in the tech sector has plagued Microsoft, as shares are down nearly 5% this week; however, today's sell-off was due to an analyst report from Morgan Stanley. Morgan's analyst sees the aforementioned weak PC demand hurting the top and bottom line but remains bullish on the company with a $37 price target. Windows 8 and the Surface tablet both are catalysts that may help Mr. Softy rise above its beleaguered industry.
Defense contractors Boeing and United Technologies both closed down more than 2%. Both companies have won deals lately: Boeing won a $9.2 billion order from General Electric's (NYSE: GE) aviation leasing business, and United Technologies subsidiary Sikorsky notched an $8.5 billion Blackhawk helicopter order from the Army and Navy. However, GE's commitment for 100 737s is not a done deal, and if forced, defense contracts could disrupt United's big deal.
It's clear that November's elections will weigh on defense contractors. Unless Congress can get its act together, the whole industry could face massive cuts. However, there are other stocks whose future is tied to whether Mitt Romney or Barack Obama is in the White House. The Motley Fool's new special free report, "These Stocks Could Skyrocket After the 2012 Presidential Election," highlights unique ways to profit from the election -- if you buy the right stocks before the next president's term begins. Download it for free.
