Please ensure Javascript is enabled for purposes of website accessibility

Why These Stocks Tempered the Dow's Gains This Morning

By Dan Caplinger - Apr 25, 2013 at 11:00AM

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

The Dow opened higher, but not by as much as the overall market.

On another relatively light day on the news front, earnings dominated the discussion for stock market investors this morning. First-time claims for unemployment benefits dropped during the week, giving those who follow economic trends a bit of positive momentum. For the most part, however, the flood of quarterly reports as earnings season reaches its peak has been the center of attention both for shareholders of the companies involved, and market-watchers, in general. As of 10:30 a.m. EDT, the Dow Jones Industrials (^DJI 0.81%) were up 60 points, while the broader market posted even more sizable gains on a percentage basis.

A couple of negative reports from Dow stocks may have held back the benchmark compared to the overall market's performance. 3M (MMM -0.03%) led the Dow's decliners with a drop of more than 3%, after missing revenue and earnings estimates for the first quarter and providing negative guidance for the remainder of the year. Citing its purchase of Ceradyne last year as hurting its margins, 3M cut its expected range for full-year 2013 earnings per share by $0.10. Although the foreign-currency fluctuations that held earnings back tend to go back and forth in their impact over successive quarters, the sluggish demand that 3M saw is more troubling as a potential threat to the company's attempt to restore its past leadership in innovation.

Oil giant ExxonMobil (XOM 2.11%) saw its stock fall about 1%, even after beating analyst estimates for its first-quarter earnings. Although Exxon's revenue suffered from lower prices and falling production of oil and gas, the integrated energy giant's downstream refining and chemical-production businesses benefited from those low prices and boosted their output. Yet, in the long run, the company's 3.5% drop in oil and gas production represents the biggest challenge for Exxon, as the natural decline of aging wells is extremely difficult to overcome for a company of its size.

On the plus side, though, Microsoft (MSFT 1.46%) managed to extend its run of rising sessions, powering ahead by nearly 3%, and hitting a new 52-week high. The company didn't have any major news to add to its Xbox announcement yesterday, but investors appear to be following in the footsteps of hedge fund ValueAct Capital, and are regaining confidence in the tech giant as an investment.

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
$32,186.83 (0.81%) $258.21
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$263.42 (1.46%) $3.80
Exxon Mobil Corporation Stock Quote
Exxon Mobil Corporation
XOM
$96.39 (2.11%) $1.99
3M Company Stock Quote
3M Company
MMM
$145.71 (-0.03%) $0.04

*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
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/25/2022.

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.