6 Reasons Why the Dow Closed Lower


After a five-day winning streak, the Dow Jones Industrial Average managed to post a losing session today, as the other major indexes rose. The Dow closed down by 23 points, or 0.17%, and now rests at 13,511. The S&P 500 closed up 0.29 points, or 0.02%, while the NASDAQ gained 6 points, or 0.22%.

Of the Dow's 30 components, 16 of them ended the trading day in the red. This afternoon, I explained why three of the Dow losers were DuPont , Caterpillar , and Alcoa . To read about the negative news that caused these companies to fall lower, click here. Or stick around to learn about the outside forces affecting the stock prices of AT&T , Verizon , and Boeing .

So what happened?
Both of the Dow's telecommunications giants had a rough time on Wall Street today. Shares of AT&T fell by 1.48% while Verizon's dropped by 1.1%. Both wireless service providers are set to announce quarterly earnings next week, and investors are probably getting nervous about the short-term costs the companies will likely take from offering subsidies for cell phones in return for customers signing long-term service contracts. AT&T will announce results next Thursday, Jan. 24, while Verizon is scheduled to release its earnings report on Tuesday, Jan. 22. AT&T recently reported that it had sold 10 million smartphones in the fourth quarter, a record for the company. At this time, it is unknown how many Verizon sold or how much it cost the service providers to sell that many phones.

In the short term, selling more phones will hurt the bottom lines of both AT&T and Verizon, but over the life of the contract, the companies make that money back plus some. Long-term shareholders and investors should praise higher cell phone sales numbers and buy on dips when shortsighted investors sell in droves.

Shares of Boeing lost 3.38% of their value today, making it the worst-performing Dow component. The company has been plagued by problems with its new 787 Dreamliner aircraft over the past few weeks and today another issue popped up, causing the stock to drop. This morning a 787 made an emergency landing after an alert went off from the plane's battery system. Last Monday, a 787 at Boston's Logan International Airport had a fire in the battery system's compartment. The two leading Japanese airlines grounded their 787 fleets until further safety reviews are conducted.

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The article 6 Reasons Why the Dow Closed Lower originally appeared on Fool.com.

Fool contributor Matt Thalman has no position in any stocks mentioned, and neither does The Motley Fool. Follow Matt on Twitter @mthalman5513. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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