Why These 3 Dow Stocks Missed the Surge

Calling any stock on the Dow Jones Industrials Average (INDEX: ^DJI) a loser today is an exercise in stretching the truth. After a month of hand-wringing over the eurozone debt crisis sent the index crashing below its opening price for the year, the Dow had a monster day and soared 2.4%. The big catalyst was an outflow of optimism that the European Central Bank and its new chief are ready to take decisive action -- i.e., more quantitative easing -- to solve the ongoing debt debacle.

The news sent every single component on the Dow Jones up for the day, but some components didn't react with the same roaring enthusiasm of their peers. Today's three "worst" performing Dow stocks were:

  • Wal-Mart (NYS: WMT) , up 0.7%

  • Johnson & Johnson (NYS: JNJ) , up 1%

  • Kraft (NYS: KFT) , up 1%

When the weakest link in a basket of 30 remarkably stable blue-chip-dividend-paying companies is still putting up the better part of a 1% gain for the day, it's a good day to be an investor. There isn't a disproportionate amount of news that was holding these companies back, per se, but it's easy to see why the components that did outpace them performed as such.

Economically sensitive Bank of America (NYS: BAC) absolutely demolished the index with a 7.6% gain for the day, but as a down-and-out big bank, it can be expected to exaggerate good or bad macroeconomic news on a given day. Caterpillar was also a huge gainer with a 3.6% run today. As a cyclical company with big international bets, this, again, makes sense.

So those Dow stocks that "underperformed" didn't do so because of any material weakness; it's just that the runners had more to be excited about. For example, Wal-Mart's only European operations are in the U.K., and while Johnson & Johnson gets about 26% of its revenue from Europe, it's in a sector that's known for its downturn resiliency. Though Kraft gets about 24% of its revenue from the region, it's also managed to consistently grow sales through all of this turmoil, so investors probably weren't worried that it would collapse into a European abyss anyway.

At the end of the day, these stock moves, though small by comparison, are still great. If you want to learn more about the real headliner, though-- Bank of America -- and why you should still buy it, you need you read our top banking analyst's newest report. It's a deep dive into the market's most traded stock, and a must-read for anyone with a position, or who is thinking about taking one, in the company.

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At the time thisarticle was published Austin Smith owns no shares of the companies mentioned here. The Motley Fool owns shares of Bank of America and Johnson & Johnson.Motley Fool newsletter serviceshave recommended buying shares of Johnson & Johnson and creating diagonal call positions in Johnson & Johnson and Wal-Mart Stores. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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