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Last Week's Biggest Dow Losers

By Matt Thalman - Feb 22, 2014 at 5:00PM

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An in-depth look at what caused a few stocks to fall.

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.

Dominating the economic front on this holiday-shortened past week was housing-related data, which on all fronts didn't look very promising. Even so, the major indexes ended the week split and only slightly changed. The Dow Jones Industrial Average (DJINDICES: ^DJI) lost 51.09 points, or 0.31%, the S&P 500 fell 2.38 points, or 0.12%, and the Nasdaq gained 19.38 points, or 0.45%.

The National Association of Home Builders kicked things off on Tuesday with its survey, indicating that sentiment is heading in the wrong direction. The NAHB index fell to 46 in February, indicating that the future for the housing industry doesn't look good, with builders citing weather, a lack of skilled labor, and limited ready-to-build land. On Wednesday the Commerce Department said new home starts fell 16% in January from December and were 2% lower in January than in the same month last year. And on Friday, the National Association of Realtors indicated that existing home sales in January dropped 5.1% to a seasonally adjusted 4.62 million, the lowest level since July 2012

At least we got some better news from the jobless claims report that came in on Thursday. The report shows 336,000 claims, versus estimates of 335,000 and the previous week's reading of 339,000. The poor recent weather doesn't seem to have contributed to staff cuts.

With all that data and despite the fact the majority of it was not good,

As for the stocks themselves, let's look first at the Dow's biggest winner of the week. Shares of Nike (NKE -0.86%) rose 1.87% on little news. However, competitor Under Armour has been getting lots of attention for its speed-skating uniforms in the Olympics. People were blaming the uniforms for the U.S. team's inability to win a single event, but even though the criticism eventually subsided, the whole issue drew attention to the industry and how some people seem to think the equipment makes the athlete, and not the other way around. That's an outlook that bodes well over the long term for athletic-apparel companies just like Nike and Under Armour.

Last week's big losers
Losing 3.1% this past week, shares of General Electric (GE -1.42%) became the Dow's third worst weekly performer. The stock went ex-dividend on Thursday and moved lower each day of the trading week on essentially no news. GE did, however, file a lawsuit against the IRS a few weeks ago, in an attempt to recoup $658 million in taxes and penalties it paid in the early 2000s. (Click here for more on the story.) GE has been criticized for its low tax bills in recent years, so this incident puts the company in the spotlight for the wrong reasons -- not to mention that it takes management's attention away from the business.  

Wal-Mart (WMT 0.11%) was the Dow's second worst performer. The stock fell 3.52% this past week in possible reaction to a number of stories. First, an analyst from Credit Suisse speculated that the company may be interested in buying Family Dollar, as a way to expand its smaller-footprint locations around the United States. Both Wal-Mart and Family Dollar, however, decline that any talks were taking place.

Next, the company reported earnings of $1.60 per share on revenue of $129.71 billion, beating analyst expectations of $1.59 and $129.51 billion. However, same-store sales declined 0.4% during the quarter and traffic dropped 1.7%, while the company gave weak forward guidance of $1.10 -$1.20 for the first quarter 2014. Analysts had been predicting $1.23.  

Finally, management said it was thinking about raising its hourly wages for all employees. The potential move appears to be separate from the discussion of raising the federal minimum wage. But if it happened, costs would rise and earnings would fall, which wouldn't please investors.  

And the worst Dow stock of the week was Coca-Cola (KO -0.23%), which also announced earnings earlier in the week. Shares fell 4.49% following the report, which included revenue of $11.04 billion and earnings of $0.46. Analysts were expecting sales of $11.31 billion and EPS of $0.46. What caused the stock to fall, though, was the continued decline in volume and weakening sales within North America, and the lack of any major growth catalyst moving forward. That could be why Coke recently announced its deal with Green Mountain Coffee Roasters as a way to diversify its business and begin growing sales again even if soda sales continue to fall.  

The other Dow losers this week:

  • 3M, down 0.41%
  • American Express, down 0.28%
  • AT&T, down 1.05%
  • Boeing, Down 1.44%
  • Chevron, down 0.7%
  • Cisco, down 1.9%
  • Home Depot, down 0.24%
  • Intel, down 1.37%
  • IBM, down 0.49%
  • Johnson & Johnson, down 1.33%
  • JPMorgan Chase, down 0.92%
  • Pfizer, down 1.5%
  • Procter & Gamble, down 1.8%
  • Travelers, down 0.27%
  • Visa, down 1.16%

Matt Thalman owns shares of Berkshire Hathaway, Coca-Cola, Home Depot, Intel, Johnson & Johnson, JPMorgan Chase, Procter & Gamble, and Under Armour. The Motley Fool recommends 3M, Berkshire Hathaway, Chevron, Cisco Systems, Coca-Cola, Green Mountain Coffee Roasters, Home Depot, Intel, Johnson & Johnson, Nike, Procter & Gamble, Under Armour, and Visa and owns shares of Berkshire Hathaway, Coca-Cola, General Electric, Intel, IBM, Johnson & Johnson, JPMorgan Chase, Nike, Under Armour, and Visa. Try any of our Foolish newsletter services free for 30 days. 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.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$34,152.01 (0.00%) $0.00
General Electric Company Stock Quote
General Electric Company
$79.92 (-1.42%) $-1.15
Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$139.52 (0.11%) $0.15
The Coca-Cola Company Stock Quote
The Coca-Cola Company
$64.88 (-0.23%) $0.15
NIKE, Inc. Stock Quote
NIKE, Inc.
$117.04 (-0.86%) $-1.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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