Please ensure Javascript is enabled for purposes of website accessibility

Why Microsoft's Drop Isn't Holding the Dow Back

By Dan Caplinger - Mar 6, 2013 at 1:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A brief look at the market's weak performers so far today.

The Dow Jones Industrials (^DJI 1.76%) is continuing its run toward another record high today, as a relative lack of troubling news concerning global markets or the government budget impasse allowed the positive momentum of yesterday's record to continue today. By 12:45 p.m. EST, the Dow was up 42 points, shrugging off a drop in new factory orders that ate into more extensive gains earlier in the day.

But Microsoft (MSFT 2.76%) didn't join in the Dow's gains, falling more than 1% after regulators in the European Union imposed a fine of more than $730 million on the software giant. The fine is the latest in a string of decisions against Microsoft and comes amid allegations that the company failed to comply with the terms of its early 2009 settlement with regulators, as it didn't offer software on tens of millions of computers that should have given users a full suite of competing Internet browsers to choose from. Microsoft has paid billions in fines, but it continues to draw scrutiny regarding antitrust concerns over the way it handles its various software offerings.

Elsewhere, unmanned-aerial-vehicle specialist AeroVironment (AVAV 6.60%) plunged 11.4% after a poor earnings report last night. The company not only missed top- and bottom-line estimates by a wide margin, but also cut its guidance for 2013, blaming delays in government orders for the shortfall. As budget pressures increase, it's hard to see the Department of Defense getting any faster with its order process, so these problems could plague the industry for a long time to come.

Finally, Hovnanian (HOV 6.60%) fell more than 2% even after reporting a smaller-than-expected loss for its most recent quarter. Although rising contracts and backlogs led CEO Ara Hovnanian to predict that the company will become profitable this year, investors have already taken a lot of good news into account in bidding up the stock throughout the past year. Investors will have to see increasingly strong results from Hovnanian in order to justify further gains from current lofty share prices.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,212.96 (1.76%) $575.77
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$273.24 (2.76%) $7.34
Hovnanian Enterprises, Inc. Stock Quote
Hovnanian Enterprises, Inc.
HOV
$50.41 (6.60%) $3.12
AeroVironment, Inc. Stock Quote
AeroVironment, Inc.
AVAV
$95.99 (6.60%) $5.94

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.