Manufacturing Data Hurts the Dow


As of 12:55 p.m. EDT the Dow Jones Industrial Average is down a mere 15 points, or 0.1%. The other major indexes are faring worse so far: The S&P 500 has dropped 0.45% while the NASDAQ is down 0.77%.

A widely followed data point released today is likely causing the markets to fall. The Institute for Supply Management's factory index was released this morning, and it fell from 54.2 last month to a 51.3 in March. Any figure greater than 50 represents growth, but a higher number would indicate growth at a faster pace.

Today's top Dow downers
The poor ISM numbers are likely hurting a few of the Dow's losers today. Shares of Alcoa are down 1.9%, while Caterpillar has lost 1.5%, and United Technologies is even down 0.4%. Caterpillar's decline should not be a shock to anyone who saw its February sales numbers, which were disappointing, to say the least. And when sales are lower, we should expect lower production as demand flags.

As for Alcoa, the company has struggled for more than a year now as aluminum prices remain at a depressed level due to oversupply in China. The one possible good data point for Alcoa today was the gauge of U.S. manufacturer stockpiles, which also continues to fall, moving from 47.5 to 46.5. Anything below 50 indicates that stockpiles are shrinking.

Anytime a report like this comes out, a company like United Technologies is going to take a slight hit, as it is today. This report gives investors a heads-up that big manufacturers aren't knocking it out of the park, likely resulting in lower revenue and profit during the quarter.

Outside of manufacturing, shares of Intel are down 2.2% after the stock was downgraded by JMP Securities' Alex Guana. The analyst believes Intel's full-year EPS will be lower than the $2.15 he had previously expected. A new target of $1.85 per share was set for this year, and he even lowered his EPS estimate for next year from $2.25 to a measly $1.70. Guana believes there may be a delay with delivery of some of Intel's' new microprocessors, which would ultimately hit earnings.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, Intel must find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.

The article Manufacturing Data Hurts the Dow originally appeared on

Fool contributor Matt Thalmanhas no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. 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. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.