The stock market has proven to be especially resilient this week. After the huge gains that we saw in the first two weeks of September, it would've been completely reasonable for stocks to have given back some of those profits. Yet, even with concerns arising today about the health of the global economy, with data from China, Europe, and the U.S. all pointing to some troubling trends, stocks have held their ground quite well. Today, the Dow Jones Industrials (INDEX: ^DJI) recovered from a nearly 75-point drop earlier in the session to finish up nearly 20 points on the day.
Even with the Dow's overall recovery, some stocks weren't able to get back to even. Industrial stocks Caterpillar (NYSE: CAT) and Alcoa (NYSE: AA) were both among the average's biggest percentage losers today, falling 1.5% and 2.3% respectively, after a report from the Philadelphia branch of the Federal Reserve showed that its regional index of economic activity had its fifth straight monthly negative reading. Alcoa's ongoing attempts to sell its smelting plant on the Italian island of Sardinia have attracted a lot of media attention, but it's only a small part of the aluminum maker's business, and is just a symptom of the overall malaise that the company is suffering. Meanwhile, Caterpillar is particularly sensitive to economic conditions in both the U.S. and China, and troubling reports from both areas raise special concern with the heavy-equipment maker.
United Technologies (NYSE: UTX) dropped about 1%. Reuters quoted the company's CFO, Greg Hayes, as saying that "[w]e're still grasping a little bit at straws here in terms of how do we stabilize the global economy," and that "[w]e still see downward pressure rather than recovery ... in most of the global markets." Pointing in particular to China, Hayes said that growth levels this year could come in weaker than many expect. Although the company expects roughly flat earnings this year, United Tech could face big challenges if Hayes turns out to be right in his apparent skepticism about the recovery.
Finally, Hewlett-Packard (NYSE: HPQ) gave up almost 2%, as a Senate panel said that the company had taken advantage of various tax-cutting measures involving international divisions. It's hard to argue that this is really news to anyone, as numerous companies use similar strategies to reduce their tax liability. But HP really doesn't need any more bad publicity, given its ongoing business struggles.
Don't be afraid
Even the best stocks lose ground from time to time. But it's important to keep tabs on your favorite stocks to make sure nothing fundamental has changed about their prospects. For instance, Caterpillar is vulnerable to economic conditions around the world, but it's working to grow, no matter what happens with the economy. Learn more in our premium report on Caterpillar. It's yours easily; just click here to get started.
Fool contributor Dan Caplinger doesn't own shares of the companies mentioned in this article. You can follow him on Twitter @DanCaplinger. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
