Now that we're in the thick of earnings season, investors seem to have finally tuned out the daily noise surrounding the markets. A number of economic data points were released this week, some showing that the economy was improving, and others indicating that although we may be taking two steps forward, we're still occasionally taking one step back. Either way, all the major indexes surged higher this week and are on the verge of breaking all-time highs.
Not all individual stocks are sharing in the glory, though. Let's first look at how the major stock indexes performed this week, and then we'll tackle what caused a few of the Dow Jones Industrial Average's (DJINDICES:^DJI) stocks to fall lower over the past four trading days.
The Dow finished the week up 246 points, or 1.8%, and now sits at 13,895. The index is on a six-day winning streak thanks to better-than-expected overall earnings results. The other two major U.S. indexes also had a winning week, as the S&P 500 moved higher by 1.14%, or 16.98 points, while the Nasdaq gained a mere 15 points, or 0.48%. Similar to the Dow, the Nasdaq is a weighted index, and when larger companies make big moves, it shows in the index. That's why, as the Dow rode IBM (NYSE:IBM) higher this week, the Nasdaq struggled along with Apple. (To learn more about what happened, click here.)
The big winners
But before I get to the Dow losers, let's take a quick look at the big winner. For the second week in a row, the best-performing Dow component was IBM, which gained most of its 5.4% for the shortened trading week after announcing earnings on Wednesday. The company posted favorable earnings results and beat estimates for an unheard-of 40th straight quarter. IBM accounts for more than 10% of the Dow, helping the index close higher even though the majority its components moved lower.
The big losers
Caterpillar (NYSE:CAT) was the Dow's biggest loser this past week, as shares slid lower by 2.09%. The week started off poorly, after the company announced last Friday that it will take a $580 million writedown for a Chinese mining equipment manufacturer it purchased just last year. Caterpillar paid $800 million for China ERA Mining Machinery, but because of alleged accounting fraud, the unit isn't worth as much as it made others to believe it was. An internal investigation by Caterpillar has found that managers of the mining equipment company had been cooking the books for a number of years before the acquisition.
Then, just yesterday, the company released quarterly sales numbers showing that global machines sales from October to the end of December fell by 1%. The company's key markets, North America and Asia/Pacific, fell by 6% and 7%, respectively, marking the company's first sales decline in more than two and a half years. Sales did rise by 14% in Latin America, however.
Another big Dow loser this week was Coca-Cola (NYSE:KO). Yesterday I noted that the company's closest competitor, PepsiCo, is removing a controversial ingredient in its Gatorade sports drinks, but Coke hasn't commented on whether it would follow suit with its PowerAde beverage. If Coke were to drag its feet with this change, it could hurt PowerAde's market share, though that probably isn't why the company's share price dropped by 1.72% this week.
Chip giant Intel lost 1.36% of its value this past week, after its leading competitor in the personal-computer chip industry, Advanced Micro Devices, announced positive earnings after the markets closed on Tuesday. Essentially, as AMD strengthens, it's believed that Intel is weakening. Whether or not that's true, time will tell, but for now, long-term-oriented shareholders shouldn't be concerned, as Intel holds a massive amount more market share than AMD in the PC chip arena.
After being the top Dow stock for three weeks in a row, shares of Hewlett-Packard (NYSE:HPQ) finally came back to earth a little this past week. The stock is up nearly 20% year to date after falling almost 50% in 2012. The company's fundamentals haven't drastically changed over the past few weeks, which indicates that the stock's decline in 2012 and the run-up this year have probably both been overblown.
Fool contributor Matt Thalman has no position in any stocks mentioned. Follow Matt on Twitter: @mthalman5513. The Motley Fool recommends Apple, Coca-Cola, and PepsiCo and owns shares of Apple, IBM, and PepsiCo. 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 Motley Fool has a disclosure policy.