For a week in which eight of the Dow Jones Industrial Average's (DJINDICES:^DJI) 30 components reported earnings, the index ended the week with a lot less excitement than most would have predicted. The Dow changed only 0.09% over the past five trading sessions, with the blue-chip average rising 15 points last week to end the week at 15,558, while the two other major indexes ended the week on uneven footing. The S&P 500 lost 0.02%, while the Nasdaq rose 0.71%.
Before we hit the Dow losers, let's look at this week's best-performing component. After falling slightly more than 4% two weeks ago, Hewlett-Packard (NYSE:HPQ) rose 3.38% this past week, even after a 0.95% drop on Friday. The continued drama involving Dell may have helped push the stock higher, as a higher buyout offer for the company may indicate that HP deserves an additionally higher market cap. Furthermore, the more negative attention Dell attracts, the less likely consumers are going to want to purchase a Dell, which could also mean higher sales for HP.
The big losers
Caterpillar (NYSE:CAT) was the worst Dow component of the week, down 4.19% after the company reported earnings on Wednesday and missed expectations. Earnings per share came in at $1.45, down 43% from $2.54 from the second quarter last year and much worse than the $1.69 Wall Street wanted to see. Revenue came in at $14.6 billion, which was also lower than the $15.1 billion analysts wanted to see. Furthermore, the company cut its full-year forecast and told investors it will begin cutting costs as a way to deal with lower sales.
With mixed results being reported on the housing front this past week, shares of Home Depot (NYSE:HD) lost 1.89%. On Monday, the National Association of Realtors reported that existing-home sales declined by 1.2% in June when compared with May and that the annualized sales figure fell to 5.08 million. Economists had expected the annual sales number to hit 5.28 million in June. On Tuesday, the Federal Housing Agency reported that the home-price index rose by 0.7% in May compared with April's numbers. In addition, on a year-over-year basis, housing prices are up 7.3%. These two reports separately may not look bad, but with housing prices up in May and sales declining in June, we may be hitting the point where people are no longer able to afford a new home, which would hurt the industry and Home Depot moving forward.
McDonald's (NYSE:MCD) lost 2.23% this past week, after the company announced earnings Monday morning. The fast-food leader missed Wall Street's expected earnings per share by $0.02, while same-store sales growth was only 1% during the quarter. That's less than GDP growth and a possible sign that McDonald's is weakening. In addition, CEO Don Thompson told analysts that based on recent sales results, the remainder of the year will be a challenge. Poor sales growth, an earnings miss, and a warning that things may get bad as we move toward the end of the year are all things investors don't want to hear. So it may be a rough year for McDonald's shareholders for the last few months of 2013, but at least the company's 3.1% dividend yield should help long term investor's ride out the bad weather.
The other Dow losers this week:
(For more information on why shares of the other losers fell lower this past week, click on the following links.)
- AT&T, down 0.58%
- Bank of America, down 0.13%
- Boeing, down 1.27%
- Cisco, 1.23%
- ExxonMobil, down 0.39%
- General Electric, down 0.28%
- JPMorgan Chase, down 0.19%
- Procter & Gamble, down 1.2%
- Coca-Cola, down 1.09%
- Travelers, down 1.25%
- Wal-Mart, down 0.1%
- Walt Disney, down 0.27%