Last Week's Worst-Performing Dow Components
Jun 15th 2013 5:00PM
Updated Jun 15th 2013 5:02PM
As we're now just days away from the next Federal Reserve meeting, fear, concern, and, most importantly, uncertainty ran rampant this past week on Wall Street, causing the three major indexes to fall lower over the past five trading sessions. The Dow Jones Industrial Average lost 177 points, or 1.16%, and now sits at 15,070, after it briefly dipped below the 15,000 mark this week during intraday trading. The S&P 500 finished the week lower by 1.01%, while the Nasdaq was the big loser, after it declined by 1.31%.
A number of mixed economic data points were released during the week, which didn't give investors any true indication of whether the economy is any better than it was before the last Fed meeting, or whether the central bank will now begin slowing its stimulus programs.
Before we hit the Dow losers, for the second consecutive week the index's biggest winner was Pfizer . After gaining 3.78% two weeks ago, the stock rose another 3.11% this past week. The main catalyst for the move higher was the announcement that Pfizer and Takeda had come to a settlement agreement with Teva Pharmaceutical and Sun Pharmaceutical relating to a patent infringement case. The settlement amount came to $2.15 billion, of which Pfizer will receive the lion's shares of and the rest will go to Takeda. This settlement is for more money than both Teva and Sun made on the sale of their drugs that infringed on the patent, so this should help keep the generic-pharmaceutical companies at bay for some time.
The big losers
The worst-performing Dow component of the week was American Express , which lost 5.24% of its value. The stock probably moved lower for a number of reasons this week, including a stock downgrade, a poor initial stock rating from another firm, a weak consumer sentiment number, and rioting in the Middle East. The downgrade came from Barclays, which lowered the rating from "overweight" to "equal weight" but increased the price target from $72 to $82 per share. Oppenheimer also gave the company a less than stellar rating, as it initiated coverage on American Express this week and rated the stock a "perform." The weak Thomson Reuters/University of Michigan Consumer Sentiment Index may indicate that Americans will cut back on spending and the use of credit, which will have a negative effect on American Express and the other credit card companies. And lastly, the rioting in Turkey this week may hurt American Express, as it earns a great deal of revenue from the tourism industry, and with Istanbul being such an important tourist destination, revenues may take a hit.
DuPont ended the week lower by 4.83% after the company released an updated earnings forecast for the remainder of 2013. Management announced that earnings will probably come in at the lower end of its previous forecast of $3.85 to $4.05 per share. The company made a number of excuses for the lower profit, and one that gained the most attention from analysts and critics was the unusual weather so far this year. Analysts had been expecting 2013 profits to hit $3.89, so we may see that number slowly move lower in the coming weeks. Furthermore, Bank of America/Merrill Lynch downgraded the stock this past week from "buy" to "neutral." That move also probably put downward pressure on the share price.
Shares of Microsoft ended the week as the third worst performing Dow stock, after it lost 3.61% of its value. On Thursday, the stock declined after the company announced that its new Xbox One won't be available in the Asian markets until sometime during late 2014, as opposed to a late 2013 release date here in the United States. With Sony's PlayStation 4 due to hit shelves before the Christmas shopping season this year all around the world, Microsoft will probably lose some market share in the regions of the world where its gaming console isn't available.
A few other Dow losers this week:
- Alcoa, down 1.2%
- Boeing, down 0.19%
- Cisco, down 0.61%
- Chevron, down 0.51%
- General Electric, down 0.92%
- Home Depot, down 3.18%
- Coca-Cola, down 2.24%
- Travelers, down 1.15%
- Wal-Mart, down 1.71%
- Walt Disney, down 1.46%
- United Technologies, down 0.33%
- IBM, down 1.59%
- JPMorgan Chase, down 1.54%
- Merck, down 1.01%
- Hewlett-Packard, down 0.2%
- ExxonMobil, down 0.77%
- Caterpillar, down 0.6%
- Bank of America, down 2.01%
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The article Last Week's Worst-Performing Dow Components originally appeared on Fool.com.Fool contributor Matt Thalman owns shares of Bank of America, Microsoft, JPMorgan Chase, and Walt Disney. 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. The Motley Fool recommends American Express, Bank of America, Chevron, Cisco Systems, Coca-Cola, Home Depot, and Walt Disney and owns shares of Bank of America, General Electric Company, IBM, JPMorgan Chase, Microsoft, and Walt Disney. 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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