Last Week's Big Dow Losers
Mar 16th 2013 5:00PM
Updated Mar 16th 2013 5:06PM
Although the Dow Jones Industrial Average's 10-day winning streak came to an end on Friday, the index still managed to gain more than 0.81% this past week. Over the past five trading sessions, the Dow added 117 points and now sits at 14,514. Of the 30 blue-chip stocks that make up the Dow, 20 moved higher this week, while 10 move lower.
Before we hit the Dow losers, the index's big winner of the week was Boeing . Shares of the aircraft manufacturer gained 6.4% this past week. On Tuesday, people familiar with a deal not yet officially announced told Bloomberg that Ryanair Holdings will be purchasing 170 of Boeing's 737 jets. The purchase agreement is reportedly worth $15.1 billion to Boeing, and company officials will make the formal announcement sometime this coming week.
On Friday, Boeing shareholders rejoiced once more when the company said the 787 Dreamliner could be approved to fly within weeks. The Federal Aviation Administration, which grounded the plane back in January after one jet caught fire on a runway and another made an emergency landing because of an overheating battery, has approved the 787 for test flights. The plane's new battery insulation and safety features will certainly be put through the wringer during the trial flights, but if they pass, Boeing's shares may fly higher than the jets the company builds.
The big losers
Shares of Caterpillar stretched their weekly losing streak to six consecutive weeks, after the stock lost 1.85% over the past five trading days. While the company didn't retain the title of biggest loser, it did manage to become the second worst-performing Dow stock this week. On Thursday, reports indicated that company employees were protesting job cuts that Caterpillar has recently made.
European workers have been under stress for some time now as the region continues to struggle through a recession. The combination of constant job cuts, high unemployment rates, and austerity programs may push Caterpillar's workers to the brink, if protests become strikes as an attempt to gain greater job security.
Wal-Mart received a number of troubling reports this week, with the result that shares fell more than 0.72% over the past five trading days. On Thursday, the IRS announced that 600,000 tax returns, which had claimed education credit, would be delayed up to six weeks. Wal-Mart relies on having customers cash refund checks and then spend some of that money on large-ticket items during this time of the year, but that hasn't been the case so far in 2013.
On Tuesday, a Wal-Mart executive reported that the company had cashed only $2.7 billion worth of tax returns, while in the past Wal-Mart would normally be closer to the $4 billion mark by this point. We all still remember the internal email from the Wal-Mart executive ranting about how poorly sales were shaping up in February. We'll probably find out what the cause of the lower sales in the company's next earning release, but I would bet that a lack of tax returns will be high on the excuse list.
Also on Friday, the preliminary University of Michigan Consumer Sentiment index was released. Economists were expecting a reading of 78, after February came in at 77.6, but unexpectedly the reading fell to 71.8. The lower numbers mean U.S. consumers are less confident about the economy, the jobs market, and their own job security than they were just a few weeks ago. Typically when sentiment is low, consumers tighten their belts and spend less money, which ultimately hurts retailers across the board, which is probably what caused shares of Wal-Mart to fall on Friday.
But some argue that when the economy gets bad, Wal-Mart actually performers better, because more consumers trade down and want those "always low" prices.
Elsewhere, it was reported earlier this week that Chinese authorities are investigating Coca-Cola employees over the possibility that they improperly used GPS devices. Coke has announced that it is cooperating with authorities and has stated that some of its delivery trucks use technology that's widely available in China to improve delivery efficiencies. Different mapping technologies have been deemed illegal in China because of "national security concerns."
But even though shares of Coca-Cola lost 0.99% during the week, one analyst believes the company's future still looks good. On Thursday, the brokerage house CLSA increased its price target on Coca-Cola from $40 per share to $43 and changed the stock's rating from "underperform" to "outperform," in part because the analyst believes that through Coke's relentless marketing and branding campaigns over the past few years, the soft drink king now clearly has the upper hand in its battle against PepsiCo.
Other Dow losers this week were Procter & Gamble, which closed lower by 0.99%; JPMorgan Chase, down 0.35%; Intel; down 0.92%, Pfizer, down 0.6%; General Electric, down 1.38%; and AT&T, down 0.68%. Home Depot became the Dow's worst performer of the week, as shares of the do-it-yourself hardware-store chain fell 3.25%.
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The article Last Week's Big Dow Losers originally appeared on Fool.com.Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513. Fool contributor Matt Thalman owns shares of JPMorgan Chase. The Motley Fool recommends Coca-Cola, Home Depot, Intel, PepsiCo, and Procter & Gamble and owns shares of General Electric, Intel, JPMorgan Chase, and PepsiCo. 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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