AIG Slips as Dow Treads Water


It's not easy to stop a running of the bulls, and Friday's sideways Dow Jones Industrial Average illustrated just that, as it gained 8 points, or less than 0.1%, to close at 13,981. The slight advance shows a reluctance to slow the hurried pace of the 2013 markets, even in the face of a big disappointment from the world's most dominant big-box retail store.

Shares of Coca-Cola , after falling for five straight days, led all Dow performers, with a 1.6% gain today. Rumors are swirling that the iconic soda giant may buy energy drink company Monster Beverage , diversifying its product line into the popular world of pep-me-up drinks. After a disappointing fourth quarter, Coke could use some pep to its step, that's for sure.

Here's a good rule of thumb for investors: Be wary of any company that has reached the point where top management terms its own sales a "total disaster." Such blunt negativity doesn't bode well for business. Wal-Mart Stores was that company today, as a vice president berated via email the month-to-date revenue in February, noting that it was the worst he's seen in seven years. This was sufficient to shave 2.2% off Wally World's stock price, making it the weakling of the Dow on Friday.

The market seems to have been fixated on big name hedge fund managers in the past few weeks and months. Keeping with that theme, American International Group was revealed to be the most widely held stock by hedge funds today, overtaking a struggling Apple . Promptly falling 2.2%, AIG's own institutional popularity may have been behind the profit taking today; investors in the financial giant have seen 44% gains in the last year.

Lastly, Herbalife , up more than 20% at one point today, closed just 1.2% higher, after a steady decline during regular trading hours. Shares in the nutritional supplies company surged in early trading after famed activist investor Carl Icahn revealed a 13% ownership stake in the business yesterday. In another textbook case illustrating the influence of a handful of powerful investors, the stock gradually declined, as Icahn's pep talk on CNBC today failed to rally the stock further.

After bringing the financial world to its knees, most investors are wary about owning a stake in AIG today. We'll fill you in on both reasons to buy and reasons to sell AIG, and what areas AIG investors need to watch going forward. Just click here now for instant access.

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Fool contributor John Divine owns shares of Apple. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.The Motley Fool recommends American International Group, Apple, Coca-Cola, and Monster Beverage. The Motley Fool owns shares of American International Group, Apple, and Monster Beverage and has the following options: Long Jan 2014 $25 Calls on American International Group and Long Jan 2014 $50 Calls on Herbalife Ltd.. 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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