2 Dow Stocks Left in the Dust

Updated

September has historically been the worst month of the year for the Dow Jones Industrial Average (INDEX: ^DJI) . Since 2000, returns for the month have averaged a negative 2.1%, compared with an average monthly gain of 0.2%.

Yet if the current trend continues, this year will serve as an exception. After only one week of trading, the index is already up by 1.6%. The figure looks particularly impressive when you examine its components. Of the 30 stocks tracked by the Dow, a full 28 of them are up for the month, leaving only two in the red.

What follows, in turn, is a look at the two stocks with the ignominious distinction of being down.


1. Kraft Foods (NAS: KFT)
Leading the way down was Kraft Foods, the proprietor of popular consumer brands such as Oreo, Oscar Mayer, and Maxwell House coffee, which saw its shares fall by 3.3% for the week. Notably, all of the decline occurred on Friday, when shares in the company plummeted by 5.5%.

The impetus for the move was the company's forward earnings guidance for the time period following the impending divestiture of its grocery business. On Oct. 1, Kraft will split into two companies. One, named Mondelez International, will house its global snack business. The other, retaining the original handle, will hold its North American grocery operations.

For the snack division, the company expects net revenue growth of 5% to 7% and 2013 operating earnings per share of $1.50 to $1.55, the latter figure being below some analysts' estimates. For its grocery division, the company has predicted long-term EPS growth in the mid- to high single digits. Needless to say, this didn't resonate with analysts, either.

2. Intel (NAS: INTC)
The other Dow stock to finish the week down was Intel, which saw its shares decline by 0.33% over the past five days. The impetus for the decline was downgraded forward guidance -- a move foretold by our own Evan Niu.

In an announcement released on Friday, the chipmaker noted: "[T]hird-quarter revenue is expected to be below the company's previous outlook as a result of weaker than expected demand in a challenging macroeconomic environment. The company now expects third-quarter revenue to be $13.2 billion, plus or minus $300 million, compared to the previous expectation of $13.8 billion to $14.8 billion."

In an ominous sign for the personal-computer industry, Intel listed three factors that are weighing on future performance. First, its customers are reducing inventory at a time when they typically grow it. Second, there's "softness" in the enterprise PC business. And third, demand from the emerging markets is slowing.

After the announcement, shares of other players in this space followed suit. Microsoft, Hewlett-Packard (NYS: HPQ) , and Cisco Systems (NAS: CSCO) were all down at Friday's close by approximately 1%. Indeed, the only one to buck the trend was Dell, which saw its shares advance on Friday, though it's down nearly 30% on the year. As my colleague Matt Thalman put it: "[T]he new reports and Intel's recent guidance are beginning to paint a grim picture for the industry. Microsoft still has smartphone and tablet sales to help growth, but HP and Dell Computers may have already seen their best days."

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The article 2 Dow Stocks Left in the Dust originally appeared on Fool.com.

Fool contributor John Maxfield has no financial position in any of the companies mentioned above. The Motley Fool owns shares of Intel, Cisco Systems, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Intel and Microsoft and creating a synthetic covered call position in Microsoft. 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. The Motley Fool has adisclosure policy.

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