How the Dow's Commodity Stocks Became Today's Losers

How the Dow's Commodity Stocks Became Today's Losers

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Major geopolitical events demand attention from investors, and they almost inevitably produce big whipsaws in both directions as tempers flare and then calm again. The stock market today reflected the general uncertainty about not only Syria but also various macroeconomic factors that could have an influence on international relations in both the economic and political spheres. After climbing nearly 100 points in the late-morning hours, the Dow Jones Industrials had to be content with a gain of just 16 points.

But even more striking was the fact that many of the stocks that jumped the most earlier in the week when Syrian tensions reached their peak became some of today's worst performers. Oil stocks ExxonMobil and Chevron led the Dow lower, posting losses of 1.8% and 1.2%, respectively. Oil fell nearly $2 per barrel to drop below the $110 level as some traders mulled the possibility that the U.S. and other countries might pull back from threats of military action in Syria. Moreover, with supplies of natural gas in the U.S. coming in above expectations, the integrated energy companies saw some of the excitement about the potential for further price gains for energy products dissipate.

Similarly, Alcoa fell 1.5%. Earlier this week, Alcoa and other major aluminum producers reportedly tried to negotiate with Japanese metal buyers for premiums for aluminum shipments of $250 per ton for the fourth quarter of 2013, which is the same level agreed to for the current quarter. Yet with the key Chinese market remaining weak, it's hard to see catalysts that will send the aluminum maker higher anytime in the near future.

Finally, beyond the Dow, The Fresh Market fell 12% on disappointing earnings news. Even though the company met expectations for its second quarter and saw same-store sales rise 3.4%, the company's guidance for earnings for the rest of the year was mostly below what investors had expected to see. With the stock having soared during 2013, shareholders clearly wanted unequivocally positive results. More patient investors might well end up being rewarded for being willing to wait a bit longer for faster growth from Fresh Market.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Chevron and The Fresh Market. 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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