Why These Were the 3 Worst Dow Stocks Today

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The Dow Jones Industrial Average (INDEX: ^DJI) was basically flat today, while the broader S&P 500 (INDEX: ^GSPC) fell 0.3%. But some stocks fared even worse. These were the three biggest losers in the Dow:

Company

Price Change

American Express (NYS: AXP) (1.1%)
Caterpillar (NYS: CAT) (0.8%)
General Electric (NYS: GE) (0.8%)

Caterpillar and GE received a bit of tough news yesterday from a couple of downbeat economic reports. The ISM Manufacturing index fell to 52.4 from 54.1 in January, meaning growth slowed. (Economists had forecast a much more positive value of 54.7.) And after a couple of strong months, construction spending fell 0.1%, its first decline in a half-year, and to that must be added higher gas prices due to speculation over a possible showdown with Iran. Higher gas prices also have the potential to get passed through to the commodities these manufacturers rely on, so both companies could be in for a rocky road -- at least in the short term.

We found out two interesting bits of news about American Express today. The company is launching a payment app for Facebook that allows users to send payments to friends, and they are paying CEO Ken Chenault $23.4 million, 37% more than it did last year. Huge payments to CEOs have obviously become par for the course, and employment and income reports were actually strong, so it's not really clear why American Express was down today. Maybe because it was up yesterday? These things do happen.

American Express, Caterpillar, and General Electric all underperformed today, but it's important to remember that what happens to the market on a day-to-day or even week-to-week basis doesn't matter nearly as much as how our stocks perform over the long run. If you're interested in one stock that our chief investment officer picked to crush the market, check out our brand-new report, "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company for free by clicking here.

At the time this article was published Ilan Moscovitzdoesn't own shares of any companies mentioned.Motley Fool newsletter serviceshave recommended creating a write covered strangle position in American Express. 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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