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Last Week's 3 Big Dow Losers

By Matt Thalman – Mar 29, 2014 at 1:00PM

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An in-depth look at what caused a few stocks to become this week’s worst performing Dow components.

Each week some of the Dow Jones Industrial Average (^DJI 0.07%) stocks rise while others fall. Understanding what caused the biggest moves can help investors understand not only why those big-percentage movers changed, but also what could cause other stocks they own to move in a big way in the future. So let's look at who became the Dow's three largest percentage losers this past week.

After falling 2.2% over the past five trading sessions, Nike (NKE -0.70%) became the Dow's third biggest loser of the week. The company reported earnings two weeks ago, and investors seem concerned about future growth prospects in the short term as management projected sales growth in the mid-single digits for the current quarter. Short-sighted investors have caused the stock to lose value over the past half-dozen trading sessions, which means longer-term investors who are willing to ride out these blips could really benefit by getting in while the stock is out of favor.

Goldman Sachs (GS 0.10%) was the second worst performing Dow component after losing 2.78%. With a judge ruling that the bank will have to face a lawsuit over mortgage securities fraud stemming all the way back to 2007, investors may be getting concerned the financial institution could see some massive fines heading its way in the near future. Up to this point Goldman hasn't had to deal with many major fines or judgments, while JPMorgan Chase and Bank of America have suffered a number of large penalties. Regardless, any fines would be short-term issues and not likely materially affect the company's business.

Finally, this past week's largest Dow loser was Visa (V 1.74%), after falling 5.05%. A large portion of Visa's decline came on Friday following news that Wal-Mart was suing the credit card company for $5 billion in damages pertaining to Visa's policy on swipe fees. Visa and a number of small retailers recently settled a similar lawsuit for $5.7 billion, but Wal-Mart was one of a number of large retailers that opted out of that class action suit. Some believe that Visa will be able to weather whatever fines it's given, but regardless this could be a big short-term issue if a number of other retailers decide to file similar suits.

Matt Thalman owns shares of Bank of America and JPMorgan Chase. The Motley Fool recommends Bank of America, Goldman Sachs, Nike, and Visa and owns shares of Bank of America, JPMorgan Chase, Nike, and Visa. 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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