As today officially kicks off earnings season, the Dow Jones Industrial Average (^DJI 0.67%) is slipping lower by 81 points, or 0.6%, while the S&P 500 (^GSPC 0.87%) moves lower by 0.55% and the NASDAQ (^IXIC 1.11%) is down 0.53. It seems last week's bull rally was short-lived and investors have now turned their attention to what really matters: earnings and the overall financial health of individual businesses. Long-term investors should focus more of time and research on these factors -- not the noise (or what some call the "news") that surrounds the markets daily. A perfect example of the noise that causes market moves can be seen among today's three biggest Dow losers: AT&T (T -1.21%), Verizon (VZ -4.67%), and Boeing (BA 0.39%).
So why are they down?
Shares of AT&T and Verizon are down by 1.3% and 1.7%, respectively, so far today. Both companies recently announced their smartphone sales numbers for the past quarter, and although AT&T had a record-breaking four months, investors are selling off the stock. The most logical reason for shares of both companies to be falling today is that short-sighted traders believe the past quarter's margins were hurt by the subsidies the carriers pay in order to get customers to sign long-term wireless services contracts. Although their fears are warranted given the record-breaking smartphone sales, the long-term value of each customer is greater than the short-term pain the companies must overcome. So while AT&T's and Verizon's leadership understands that the subsidies are good for business, traders and short-term investors are unwilling to wait and are therefore unlikely to make any money on these trades.
Shares of Boeing are sagging again, down by 3.3% today after the company was downgraded by analysts at BB&T. The downgrade comes after a 787 Dreamliner caught on fire at Boston's Logan International Airport. This is the fourth Boeing 787 Dreamliner that has had serious issues in just the past few months. While the company has not yet lost any business because of these issues with the aircraft, if problems persist, orders will be canceled and the company will take some big hits on revenue, profit, and, of course, the stock price.
