Last Week's Big Dow Losers


A record-breaking week for Dow Jones Industrial Average has left the index higher by 2.18% and on a six-day winning streak. The Dow gained 307 points from Monday to Friday, set record highs Tuesday through Friday, and now sits at 14,397. Of the Dow's 30 components, only two ended the week in the red, while 24 gained more than 1%, over the past five trading sessions.

Not only is the Dow now at record highs, but also a number of its components are setting new 52-week highs, and the other major indexes are on the verge of breaking previously set records. The S&P 500 rose by 2.17% this week and now sits at 1,551, just 14 points below its record high of 1,565. And the Nasdaq not only had a winning week but also performed better than the other two indexes, as it gained 2.35%.

Before we hit the Dow losers, let's look at the index's big winner of the week. Bank of America gained 6.43% this past week as investors anxiously awaited the results of the Federal Reserve's stress test, which would also tell investors whether the banks could now begin returning capital to their shareholders. While the results were good, they didn't pass the test with flying colors, causing shares of B of A to fall 1.5% on Friday. Industrywide, financial stocks dropped as it became clear the government may not allow dividend and share-buyback programs to resume immediately.

The bank has trailed the Dow in 2013, after crushing it in 2012. Year to date, shares of Bank of America are up only 3.96% while the Dow has risen 9.87%.

The big losers
Shares of ExxonMobil ended the week down 0.51%. The big move lower came on Thursday, when the stock fell by 1%, after company executives claimed they had no option but to use a potentially dangerous chemical called MTBE. Exxon is currently fighting a lawsuit claiming that the company contaminated drinking water in New Hampshire by adding MTBE to its gasoline. Exxon's defense is that the Clean Air Act requires the use of the chemical.

The lawsuit in New Hampshire could cost Exxon $250 million, which itself wouldn't be damaging to company, but it would open the door to other lawsuits that have been filed, potentially increasing other liabilities.

The Dow's biggest loser this week was Caterpillar , which lost 0.93% of its value. All week, shareholders couldn't seem to get over the poor housing news that came from China on Monday. In an attempt to slow the country's housing market, the Chinese government announced a few new requirements and laws. Homeowners wanting to purchase a second property in the country will now be required to provide a larger down payment than before and must be willing to pay a higher interest rate on the remaining loan than what the current market rate would be. If the property is sold, profits will be taxed at a new, higher rate.

Currently, Caterpillar receives only about 3% of its revenue from China, so any downturn in the country's housing market shouldn't have a major effect on profits. But with such a small amount of revenue coming from China, Caterpillar certainly has room to grow, which could be slowed if the housing market cools off in that part of the world.

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Check back Monday through Friday as Matt explains what caused the Dow's winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter @mthalman5513. Fool contributor Matt Thalman and The Motley Fool own shares of Bank of America. 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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