Please ensure Javascript is enabled for purposes of website accessibility

Dow Slides for Fifth Straight Day

By Ilan Moscovitz - Sep 25, 2013 at 5:15PM

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

Wal-Mart and Visa are among the biggest losers.

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrials Average (^DJI -0.07%) slid another 0.4% today, bringing its total decline over the past five trading days to 2.6%. The S&P 500 (^GSPC -0.21%) fell 0.3% for the day.

The Treasury Department reported today that the extraordinary measures it's been taking to buy more time for Congress to come up with an act to reach an agreement on the debt ceiling will run out on October 17. Without an agreement, Treasury wouldn't have the authority to pay its bills. Moody's, which upgraded U.S. debt in July partly because of rapidly shrinking budget deficits, warned yesterday that breaching the limit would be expected to damage the economy and financial markets.

Separately, the Senate voted to begin debate on a bill to keep the government open after a 21-hour delay by Texas Republican Ted Cruz. The Senate is expected to pass a bill to keep the government without gutting Obamacare, which would then go back to the House. 

It'll be interesting (or painful and mind-numbing, depending on your perspective) to see how it all gets resolved. September has seen the release of several iffy economic reports, and a government shutdown or financial crisis probably wouldn't help the recovery much. Tomorrow, we'll get to see second quarter's GDP numbers. Economists expect growth of roughly 2.5%. The research firm MacroAdvisors forecasted today that a two-week government shutdown would directly reduce GDP growth by 0.3% in the fourth quarter, not counting any fallout in the private sector. Damage from failing to raise the debt ceiling would be "far greater." 

The biggest loser in the Dow today was Wal-Mart (WMT 0.27%), which declined 2.5%. Bloomberg reported yesterday that the company is cutting orders to respond to rising inventory levels. The retail giant known for its aggressive cost-cutting on employees has faced problems with inadequately stocked stores.

Because of how quirky the Dow is calculated, Visa's (V -1.00%) 1% decline took the biggest toll on the Dow. One of the Dow's newest members, Visa agreed this week, along with Mastercard (MA -0.69%), to French authorities' demands to cut the interchange fees it charges there. Both card companies have also had to cut fees in the U.S. as well because of provisions in the 2010 Dodd-Frank Act. Interchange fees are usually earned by banks rather than card companies.

Ilan Moscovitz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of MasterCard and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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)
$34,127.25 (-0.07%) $-24.76
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,296.16 (-0.21%) $-9.04
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$139.74 (0.27%) $0.37
Mastercard Incorporated Stock Quote
Mastercard Incorporated
$356.77 (-0.69%) $-2.48
Visa Inc. Stock Quote
Visa Inc.
$214.98 (-1.00%) $-2.16

*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 analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

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.