Please ensure Javascript is enabled for purposes of website accessibility

Markets Fall, but the Dow Still Notches a Few Winners

By Matt Thalman – Feb 19, 2014 at 10:30PM

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

Investors grow concerned after reading the Fed's meeting minutes.

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.

Right around the same time the Federal Reserve released its most recent meeting minutes this afternoon, all three of the major U.S. indexes headed south. After sitting higher for the majority of the morning, the Dow Jones Industrial Average ended today's session down 89 points, or 0.56%. The S&P 500 lost 0.65%, and the Nasdaq snapped an eight-day winning streak with a decline of 0.82%.

Language in the Fed minutes that suggest more tapering in the months to come spooked investors who believe the economy is weakening. Data released both this morning and yesterday have brought news of lackluster job growth and an apparently slowing housing market. If the taper continues, some investors think the potentially fragile economy will fall back into another recession.

Only six of the Dow's 30 components finished in the black today. Two of them were Verizon (VZ 1.67%), leading the charge with a 1.2% jump, and AT&T (T 1.42%), up 0.09%. Both stocks rose on news that the FCC won't challenge a court ruling on net neutrality that was favorable to Verizon, AT&T, and other Internet providers. Instead, the commission will propose a new rule that will ban providers from blocking websites or charging bandwidth hogs like Netflix and YouTube extra for optimal delivery of their content.

Until such a rule is in place, Verizon and AT&T can claim victory. Verizon benefits more than AT&T because its FiOS service is much more widespread than AT&T's home Internet service. Furthermore, both stocks are high dividend payers, which are safe havens during times of volatility.

Another big winner today was Chevron (CVX 1.26%), which rose 0.79% while fellow oil giant ExxonMobil (XOM 0.72%) fell 0.13%. There was very little news today pertaining to either company to explain the divergence, but Chevron offers a higher dividend yield (3.5% compared with Exxon's 2.7%) and is trading at a slightly more favorable valuation (10 times past earnings, versus 12 for Exxon). What's strange is that the price of natural gas jumped another 10.77% today, while oil rose just 0.86%. That should be perceived as a positive for both companies, not just Chevron.

Regardless of whether you hold one of these telecoms or oil companies, you shouldn't be concerned about today's moves, as they don't appear to have been related to any material changes. And no one knows what will happen if the Fed keeps tapering, so there's no point in worrying about it. Just keep focusing on buying healthy companies that will continue to do well regardless of the economic condition.

Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends Chevron. We Fools don't 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 Nearly 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

AT&T Stock Quote
$19.28 (1.42%) $0.27
Exxon Mobil Stock Quote
Exxon Mobil
$111.34 (0.72%) $0.80
Chevron Stock Quote
$183.31 (1.26%) $2.28
Verizonmmunications Stock Quote
$38.98 (1.67%) $0.64

*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 12/01/2022.

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.