The shortened trading week was still a wild one. While the Nasdaq posted its second straight week of losing after a six-week winning streak, the Dow Jones Industrial Average (DJINDICES:^DJI) managed to finish the week higher by 18 points, or 0.13%. The broader based S&P 500, meanwhile, was cut down by 0.27%.
Investors had a number of issues to worry about this week, one of which was the possibility that the flow of cheap money may soon come to an end. The Federal Reserve's January meeting minutes, released on Wednesday, showed that members clearly disagree over the timeframe of the quantitative-easing program. That news sent shock waves throughout the markets, but Friday morning, one member of the Fed assured investors that its policies will continue for a long time.
Even though the Dow closed higher for the week, 10 of its components didn't, and seven of those losers fell by more than 2.4%.
Before we go through the Dow losers, let's look at the Dow's big winner: Hewlett-Packard (NYSE:HPQ), whose shares rose by 14.35%. The rally started on Thursday, as shares gained 2.4% during the regular trading session and then added as much as 6% in after hours following the company's earnings report. Investors weren't expecting much from the company as CEO Meg Whitman attempts to make right the ship, so when earnings per share came in at $0.84, well above the $0.71 Wall Street had predicted, and revenue hit $28.4 billion, as opposed to the $27.8 billion forecast, a slew of new investors flocked to the stock. That inflow caused shares to gain 12.28% on Friday.
The big losers
After finishing up 4.25% and becoming the best-performing Dow component two weeks ago, shares of Alcoa (NYSE:AA) were in the Dow basement this week. In just the four trading days this past week, Alcoa's shares lost an astonishing 7.29% of their value. Last week, the stock was trading higher after it was announced that, through a number of joint ventures, the company would in a roundabout way now be a partner with the Chinese government. This week, more news from China was behind the drop, as the country's stockpiles of aluminum have dramatically increased over the past year while demand lags behind. In major Chinese markets, aluminum inventories have risen nearly 50%. The metal's price has fallen over the past year by 7.7% on London's Metal Exchange, and it seems the decline will continue for the foreseeable future.
Shares of Caterpillar (NYSE:CAT) are now on a three-week losing streak. The stock fell by 2.65% three weeks ago, shrugged off another 1.28% two weeks ago, and slid by an additional 4.25% this past week. On Wednesday, the company announced that global sales for the three months ending in January were down 4%. The previous reading, for the three months ended in December, showed only a 1% drops. The poor sales performance was too much for shareholders to get over this week, even as Raymond James upgraded the stock on Friday from "market perform" to an "outperform."
UnitedHealth Group (NYSE:UNH) also had a rough week, after competitor Humana announced on Tuesday that profits will take a hit in 2014 because of the government's proposed Medicare Advantage rates for next year. The rate cuts will affect the whole insurance industry in the coming years. UnitedHealth continued to slide lower each day this week, as investors reworked their models with updated revenue projections. When the closing bell rang on Friday, the stock had lost 4.97%.
As the housing rebound continues to take investors on a roller-coaster ride, shares of Home Depot are riding a similar path. Data from the Department of Commerce on Wednesday showed that housing starts fell by 8.5% in January when compared with December's numbers. That report coincided on Wednesday with homebuilder Toll Brothers' worse-than-expected results in its most recent quarterly earnings report. While Home Depot's stock price is up 6.03% year to date, it's underperforming the Dow, which has risen 6.84% over the same timeframe, and if the housing industry continues to struggle, shareholders may have a disappointing year ahead.
Other Dow losers this week were Disney, as shares fell by 2.44%, United Technologies lost 0.31%, Intel dropped by 3.31%, Cisco was also cut down by 0.42%, Microsoft shed 0.89%, and Bank of America ended the week lower by 4.9%.