2 Dow Stocks That Missed the Rally

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What a way to cap off a week!

Thanks to a much-better-than-anticipated 8.3% unemployment figure, something not seen since February of 2009, the markets surged to their own multiyear high-water marks. Unfortunately, not every blue chip performed well today, but before we dive in, let's see how exactly the three largest indices fared in the week's last trading session.

 

Gain / Loss

Gain / Loss %

Ending Value

Dow Jones Industrial Average (INDEX: ^DJI) 156.821.23%12,862.23
Nasdaq45.981.61%2,905.66
S&P 50019.361.46%1,344.90

With the recovery picking up steam, all three indices are putting in impressive gains. For believers in "the January effect," there is now over a 96% chance that the markets will have a strong showing for all of 2012, and so far February is continuing that trend. Today the Nasdaq hit an 11-year high-water mark and all but two of the thirty Dow stocks were green. Those two stocks are what we are now going to focus on.

Unfortunately, not everyone can be a winner, as investors in Procter & Gamble (NYS: PG) found out. The consumer-goods maven lost 0.87%, making it the worst-performing Dow component, although it is not uncommon for a defensive stock like P&G to lag on a day when the markets are soaring. The company also reduced its 2012 guidance last week, causing UBS to downgrade the stock to neutral.

The other underachieving Dow stock was Merck (NYS: MRK) , which lost 0.18% of its value. Merck is likely still feeling the aftereffects of yesterday's disappointing earnings results, which featured an earnings beat fueled by R&D cutbacks. Poor performance was not systemic throughout Big Pharma, though: The only other declining member was Bristol-Myers Squibb (NAS: BMY) , down 0.15%. Bristol-Myers likely fell after data from Gilead's (NAS: GILD) rival oral hep-C treatment GS-7977 cured all subjects with the virus within four weeks. Gilead's treatment is further along than Bristol-Myers', and if that efficacy is paired with a solid safety profile, it will be hard for new entrants to steal away meaningful sales.

The good news, however, is that a rising tide should lift all most boats, and investors with smartly diversified portfolios get to float into the weekend slightly richer.

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At the time this article was published David Williamsonholds no position in any company mentioned.Click hereto see his holdings and a short bio.Motley Fool newsletter serviceshave recommended buying shares of Procter & Gamble and Gilead Sciences. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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