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Boeing Leads the Dow Down Despite New Orders; Home Depot Begs for Spring

By Dan Caplinger – Mar 12, 2014 at 11:00AM

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The Dow dropped for a third straight day as stock-market investors grow weary after five straight years of advances. Find out the details here.

The Dow Jones Industrials (^DJI 0.41%) have posted declines throughout the week, and Wednesday morning hasn't changed that trend. As of 11 a.m. EDT, the Dow was down 28 points, although it had recovered sharply from a 90-point decline earlier in the session. Boeing (BA -0.19%) was one of the index's biggest decliners, with home-improvement retailer Home Depot (HD -0.31%) joining the aircraft manufacturer in suffering losses this morning.

The 1% drop that hit Boeing early Wednesday was somewhat surprising, given that the company got good news from Indian airline SpiceJet in the form of an order for 42 of 737 Max 8 aircraft. With a value of $4.4 billion, this isn't the biggest deal Boeing has gotten recently, but it marks the latest in a continuing stream of orders for the company's newer aircraft models. Yet the ongoing investigation of the disappearance of a Malaysia Airlines 777-200 has introduced more uncertainty for Boeing investors. Until the cause of the presumed crash is known, the stock could remain under pressure even when Boeing gets good news on other fronts.

Meanwhile, Home Depot fell 0.8% as CEO Frank Blake told CNBC this morning that the company is looking forward to spring. The holiday season is the key part of most retailers' business year, but for home-improvement and gardening projects, Home Depot and peer Lowe's (LOW -0.12%) rely on huge sales of products during the spring months. With another big winter storm threatening much of the country today, prospects for a late seasonal warm up could put pressure on both Home Depot and Lowe's in the short run, and the potential for a shorter growing season could cause lasting impacts on their results for the whole year. Yet if spring does indeed come on schedule, Home Depot and Lowe's could get corresponding boosts in their share prices.

The moves in Boeing and Home Depot are just two examples of how many stocks in the Dow are vulnerable to short-term events. Stepping back and taking a longer-term perspective, Boeing has the potential for trillions of dollars in revenue in the next 20 years, and Home Depot has put together an impressive track record of strong corporate performance even under tough economic conditions. For the most part, sell-offs in high-quality stocks are buying opportunities for long-term investors with a sufficiently extended time horizon to ride out bumps in the road.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Home Depot. 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.

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