Why 3 Dow Stocks Are Moving Lower
Nov 20th 2012 1:12PM
Updated Nov 20th 2012 1:18PM
This morning, investors, homeowners, and basically anyone who lives in the U.S. received some good news on the housing front. The U.S. Department of Commerce released data indicating that the housing market is recovering -- and at a faster pace than most economists were expecting. Construction of new homes is up nearly 42% since this time last year, and while estimates predicted 833,000 new homes being constructed, the actual number came in at 894,000.
With the upbeat news, the Dow Jones Industrial Average (INDEX: ^DJI) is fighting to turn positive for the day, and as of 12:50 p.m. EDT, the Dow is down just 9 points, or 0.07%. So far during today's trading session, 11 of the Dow's 30 components are in the red. Three of today's losers are Caterpillar (NYS: CAT) , Hewlett-Packard (NYS: HPQ) , and Coca-Cola (NYS: KO) .
So why are they down?
This morning Caterpillar released unaudited sales results for the month of October. At first glance the numbers look good: Every area of the world in which the company operates posted higher sales this October than in October of last year. The problem arises when you look at the increases in sales during August and September compared to October's numbers. Sales are clearly trending downward in the most important markets -- the U.S. and Asia-Pacific. In August and September Caterpillar increased sales by 24% and 16%, respectively; in October sales only increased by 13%. The trend is even worse in the Asia-Pacific market, where sales grew 27% in August, 14% in September, and only 6% in October. Shares of Caterpillar are down 0.4% so far today.
Hewlett-Packard is not only the Dow's worst-performing stock of the year, but the biggest loser of the day. The company announced third-quarter earnings today which, bad as they were, have been overshadowed by the announcement that the company will be taking an $8.8 billion writedown on the software company Autonomy, which HP purchased about a year ago. Hewlett-Packard also said it is looking into certain accounting practices that Autonomy was using at the time of the buyout. Shares of HP are down 11.3% today.
Soft-drink giant Coca-Cola is losing not only 0.4% of its share value, but also a top executive. It was announced this morning that Coca-Cola's chief product supply officer, Brian Kelly, will be leaving the company to assume the CEO position at Green Mountain Coffee Roasters (NAS: GMCR) . Many believe this is a great move by Green Mountain. Kelly brings a wealth of experience to the coffee company, and now that it operates globally, it makes sense to bring in top management with experience matching the needs of the organization as it moves forward. This is certainly seen as a loss for Coke, but at an enormous company with a bounty of knowledge, Kelly shouldn't be missed for very long.
With its new management and a cheaper-than-ever stock price, many investors are wondering whether this is the end for former market darling Green Mountain or the perfect entry point for a huge rebound. You can find our recommendation on how to play the company in our new premium research report. Inside you'll find everything you need to know about Green Mountain, including whether it's a buy at today's prices. Click here for instant access.
The article Why 3 Dow Stocks Are Moving Lower originally appeared on Fool.com.Matt Thalman has no positions in the stocks mentioned above. The Motley Fool has the following options: short DEC 2012 $21.00 calls on Green Mountain Coffee Roasters, short DEC 2012 $21.00 calls on Green Mountain Coffee Roasters, long DEC 2012 $16.00 puts on Green Mountain Coffee Roasters, and long DEC 2012 $16.00 puts on Green Mountain Coffee Roasters. Motley Fool newsletter services recommend Green Mountain Coffee Roasters and The Coca-Cola Company. Try any of our Foolish newsletter services free for 30 days. 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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