The Stocks to Blame for the Dow's Drop
The Dow Jones Industrial Average (INDEX: ^DJI) closed today's trading session lower by more than 26 points. The index was as low at 13,552, down 57 points early in the day, but it finally ended at 13,583, down only 0.19%. The early slide was in response to comments from the World Bank. The organization cut its growth outlook for China and other Asia-Pacific economies to 7.2%, down from the estimated 7.6% growth rate it had announced in May.
Not all the Dow components moved lower on the World Bank's announcement; 11 were in the green and one was flat for the day. Of the 18 losers, four of them were Disney (NYS: DIS) , Verizon (NYS: VZ) , Hewlett-Packard (NYS: HPQ) , and Home Depot (NYS: HD) .
So why are they down?
Verizon Wireless slid 1.02% lower today after the Federal Communications Commission announced plans late Friday to reduce regulation for exclusive programming deals. Comcast and Time Warner will gain from the ruling, which will give them control over regional sports-network distribution. Besides Verizon, AT&T, DISH Network, and DirecTV will find themselves on the wrong end of the deal.
Disney also slid more than 1.21% today, after an analyst at Caris downgraded the stock to "average" from "above average." This came on a day when the company also saw its newest animated film, Frankenweenie, come in fourth place, making only $11 million at the box office this weekend.
Although neither company had any major news related directly to it, both Hewlett-Packard and Home Depot closed the day as the worst two Dow stocks, down 1.83% and 2.09%, respectively. Oddly enough, Home Depot is the second best-performing Dow component year to date, up more than 47%, while Hewlett-Packard is the worst Dow stock, down more than 43% during the same time frame.
Hewlett-Packard's fall today could be related to the World Bank's comments. The reduced growth rates indicate that demand for Asian goods is slowing, and with the majority of consumer electronics being produced in Asia-Pacific countries, PC makers will surely feel the lack of demand.
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The article The Stocks to Blame for the Dow's Drop originally appeared on Fool.com.Fool contributor Matt Thalman owns no shares of any company mentioned above. The Motley Fool owns shares of Walt Disney. Motley Fool newsletter services have recommended buying shares of Walt Disney and Home Depot. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.
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