Please ensure Javascript is enabled for purposes of website accessibility

The 5 Stocks Dragging Down the Dow in 2014

By Alex Planes – Feb 6, 2014 at 12:09PM

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

These five components have been bad news for index investors this year, but that doesn't mean they'll be down for the long haul.

It hasn't been a particularly good year for investors, as the Dow Jones Industrial Average (^DJI 0.45%) has already lost 6% of its value in barely more than a month of trading. Few of the index's components have escaped the bloodbath, but some have led the decline as poor results, macroeconomic fears, or other inscrutable factors send shares to fresh lows. Let's examine the five worst components in the Dow of 2014:

^DJI Chart

^DJI data by YCharts.

Boeing (BA 2.01%) is being punished after a stellar 2013 in which it became one of the Dow's best stocks. The sell-off accelerated after the aircraft manufacturer posted fourth-quarter earnings and provided underwhelming revenue guidance for 2014. It also hasn't helped that the company's flagship 787 Dreamliner jet continues to have mechanical and technical problems -- just yesterday, an Air India 787 had to make an emergency landing in Malaysia after an onboard computer failed.

Chevron's (CVX -0.29%) disappointing earnings can be easily pegged on weaker energy prices, which also go a long way toward explaining a similar drop in ExxonMobil stock over the past few weeks -- the world's largest public oil company posted underwhelming earnings of its own this past week. Both companies are integrated, so refining operations have been hit by the shrinking spread between West Texas Intermediate (WTI) and Brent crude prices. As refiners rely on cheaper domestic WTI to drive profitability, the narrow spread throughout the summer weighed heavily on both companies. On the plus side, the spread has again widened, which is good news for 2014, so far:

WTI Crude Oil Spot Price Chart

WTI Crude Oil Spot Price data by YCharts.

General Electric (GE 0.31%) has been hit by across-the-board weakness in American manufacturing. The Institute for Supply Management manufacturing index looked wobbly this month, and since so much of GE's success is tied to the strength of manufacturing orders, it makes sense that investors would be skittish. However, that doesn't appear to be GE's core weakness -- the company's mining segment has struggled with weak commodity prices and emerging markets belt-tightening. However, this year's drop could be a buying opportunity for long-term investors, as Fool contributor Lennox Yieke pointed out.

Travelers (TRV 0.48%) was another company suffering from outsized investor expectations. Its latest earnings actually trounced Wall Street's earnings-per-share estimates, but Fool contributor Jessica Alling noted that investors are now afraid that a big storm or other major natural disaster could wreck the insurer's positive momentum. The last quarter was surprisingly quiet, weather-wise, which helped Travelers beat expectations. But it hasn't helped that margins are looking a little weak.

Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.

The Motley Fool recommends Chevron. The Motley Fool owns shares of General Electric Company. 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)
$34,347.03 (0.45%) $152.97
The Travelers Companies Stock Quote
The Travelers Companies
$188.91 (0.48%) $0.90
Boeing Stock Quote
$178.36 (2.01%) $3.51
General Electric Stock Quote
General Electric
$88.14 (0.31%) $0.27
Chevron Stock Quote
$183.70 (-0.29%) $0.54

*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 11/26/2022.

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.