The sell-off that began last week across American markets is rolling on, reversing nearly all of the gains posted during a four-day rally that began at the end of March. The Dow Jones Industrial Average (DJINDICES:^DJI) was down 0.6% heading into lunch, and its value of 16,325 points was in line with its close on March 28, the first day of its now-undone rally. The S&P 500's (SNPINDEX:^GSPC) 0.5% drop to 1,855 points also returned it to its closing value on March 28.
Both indices have had a difficult time going anywhere this year -- the Dow has yet to clear the 16,576-point close from the last day of 2013, and the S&P is less than 1 percentage point higher than the 1,848-point close it recorded on Dec. 31.
The Dow's big gainer today, Intel (NASDAQ:INTC), was up 2% on the heels of its second upgrade in less than a week. Last Thursday, Piper Jaffray upgraded the chipmaker to buy and placed a new $30 price target on its shares. This morning, Pacific Crest followed suit by upgrading Intel shares to buy as well, with a $31 price target. That's another 16% upside from today's pop; since most analysts covering the stock still rate it as a hold, there could be more upside ahead if more minds begin changing on Wall Street.
Intel is also the megacap with the largest gain on the S&P 500 this morning, but its weight on both indices isn't nearly enough to counteract the drag produced by Visa (NYSE:V) and Pfizer (NYSE:PFE), which are the worst-performing megacaps on the S&P and the worst-performing Dow stocks on this otherwise uneventful day. Only 135 or so of the S&P's 500 stocks were in positive territory heading into lunchtime, but only one of the index's 500 components have suffered a decline in excess of 4%. This loss, in Genworth Financial, doesn't have quite the same impact on the Dow as Visa's 2.7% drop.
The credit card issuer with the $130 billion market cap has been sliding all morning as investors digest a spate of bad news, including fellow Dow component Wal-Mart's intent to sue over "swipe fees" and the megaretailer's move to switch its branded cards from one rival card network to the other, which is a major missed opportunity for Visa. As the highest-priced stock on the Dow, Visa's woes have roughly eight times the impact on the index's movement than the far-lower-priced Intel's positive momentum.
Pfizer, experiencing a 2.7% loss as of noon, has barely more impact on the Dow than Intel due to its $31 share price -- but its $200 billion market cap gives it greater weight on the market-cap-weighted S&P than either Visa or Intel, which are both valued at about $130 billion. The world's largest drugmaker is down in the dumps today despite positive news out of phase 2 trials of its breast-cancer drug palbociclib. Apparently, "good news" isn't good enough these days for investors who seem to have become more accustomed to the manic fluctuations of do-or-die small-cap biotechs than the slow-and-steady progress of megacap pharmaceutical companies. Pfizer has done a great job boosting its bottom line over the past three years, but sales are down nearly 20% from 2010; and if the company can't come up with a few more blockbusters, it could lose its positive earnings-per-share momentum soon as well.