Dow May End 20-Day Streak

Updated

Following news that the U.S. trade deficit came in lower than expected, the major indexes are all moderately lower as of 12:55 p.m. EDT. The Dow Jones Industrial Average is down 39 points, or 0.26%, while the S&P 500 has lost 0.27% and the Nasdaq is down 0.19%. The Dow's odds of extending its streak of positive Tuesdays to 21 are looking increasingly slim.

The trade deficit was expected to hit $41.1 billion, but it only rose to $40.3 billion from $37.1 billion in March. The Department of Commerce announced that imports had climbed 2.4% in the month, which was twice the increase in exports. The strongest areas for imports were automobiles and small electronics such as cellphones and personal computers.

A few Dow losers
Shares of Home Depot are trading lower by 1.5% today despite a report from Core Logic indicating that housing prices have risen 12.1% from April 2012 to the end of April 2013. That's a great sign that the housing recovery is moving right along, but some investors are now trading this news differently from before. At the beginning of the recovery, the massive number of vacant and foreclosed homes made new construction seem impossible, therefore investors focused on Home Depot and Lowe's to play the recovery. But now prices are moving higher, and inventory of existing homes is lower, so investors are shifting from the home supply stores to the homebuilders, which will likely perform better over the next few years.


Boeing is down 0.7% today after the company received a somewhat negative comment from a big aircraft customer. Qatar Airways, one of the world's fastest-growing airlines, said it would not launch the new 787-10X aircraft. Qatar Airways chief executive Akbar Al Baker told Reuters, "We like launching aircraft but not every aircraft." This may be a nice way of saying, "We don't want to buy your plane and have it grounded for months, as we recently saw with the 787 Dreamliner." Quality concerns will likely abound when the new 787-10X is launched, and with a major Boeing customer already showing hesitance, we could well see other interested customers stand back until these concerns are put to bed.

Battered aluminum giant Alcoa is also trading lower this Tuesday afternoon, down 1.1%. During the Dow's 20-Tuesday winning streak, Alcoa has been the worst-performing stock on the index, averaging a gain of only 0.1%. Meanwhile, Bank of America has averaged a 1% gain over the past 20 Tuesdays. Further, Alcoa has ended only eight of those 20 sessions in the green, while 3M made gains on 18 of 20 days. Today's decline could owe to a hangover from yesterday's PMI numbers or, as some have suggested, algorithmic trading.

More foolish insight
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The article Dow May End 20-Day Streak originally appeared on Fool.com.

Fool contributor Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends Home Depot. 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.

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