The Only Dow Stocks to Miss Today's Rally

The Dow Jones Industrials posted its second straight triple-digit gain today, rising more than 115 points as apparent ongoing progress in getting the fiscal cliff resolved was enough to send hopeful investors scurrying to buy. Positive economic news also played a role, with optimism from the homebuilding industry suggesting that the housing market's recent bottom may indeed prove to be the low point in the cycle. The S&P 500 and Nasdaq Composite posted even stronger gains of 1.2% and 1.5%, respectively.

Interestingly, though, Home Depot was one of just four stocks to lose ground today. Ordinarily, the home-improvement retailer has followed the improving housing industry upward, but following on the heels of yesterday's 2% gain for the stock, today's drop of just half a percent looks more like profit-taking following positive news than anything specifically worrisome for Home Depot's future prospects.

General Electric was the biggest loser in the Dow today, falling more than 1% after trimming its estimates on revenue from its industrial divisions from 10% to 8%. Yet the company has a lot of irons in the fire, including a potential deal to buy aerospace supply company Avio, an agreement with Taiwan Power to service wind turbines, and a collaboration with Merck over developing Alzheimer's drugs. The moves all show the scope of GE's conglomerate business.

Coca-Cola dropped about half a percent. Despite having no huge news, Coke is a commonly held defensive-oriented stock, and with many seeing the market potentially moving higher in the wake of a coming fiscal cliff deal, investors may gravitate more toward cyclically sensitive stocks in the hope of reaping bigger gains. Nevertheless, Coke's long-term prospects rely on a regeneration of growth in the U.S. market along with continued strength abroad.

Finally, Verizon gave up half a percent. Despite having a very strong 2012, the company has been reluctant to boost investment until it's certain that a fiscal cliff deal will avert a U.S. recession. If a deal gets reached, then Verizon may well be more willing to spend more to improve its wireless network and compete more strongly against up-and-coming rivals.

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Fool contributor Dan Caplinger has no positions in the stocks mentioned above. You can follow him on Twitter, @DanCaplinger. The Motley Fool owns shares of General Electric. Motley Fool newsletter services recommend Home Depot and Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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