Last Week's Worst Performing Dow Components

Last Week's Worst Performing Dow Components

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.

It was a big week in terms of economic data with the jobs report, the beige book, housing information, trade deficit information, and, of course, the potential for conflict in Syria. But even with all those headwinds, the markets looked strong this past week, and after four consecutive weeks in which the Dow Jones Industrial Average moved lower, it has finally broken its losing streak. Over the past four days of trading, the index managed to gain 112 points, or 0.75%, and now sits at 14,922. The other two major indexes, the S&P 500 and the Nasdaq, also closed higher this week, gaining 1.35% and 1.95%, respectively.

Before we hit the Dow losers, let's look at this week's best performing component. JPMorgan Chase gained 4.01% this past week, mainly on the announcement of the two major M&A deals reported on Monday. JPMorgan is reportedly one of the lead underwriters involved in Verizon's $130 billion buyout of Vodafone's 45% stake in the joint venture Verizon Wireless. That deal alone is estimated to line JPMorgan's pockets with more than $600 million in fees. It's also likely that the company will be involved in the Microsoft -Nokia deal, and while that won't be as lucrative for the bank, it's sure to make some decent coin.

The big losers
Speaking of Microsoft, it was the Dow's biggest loser this past week, falling 6.73%. That decline comes after the stock lost 3.88% two weeks ago, making it one of the Dow's worst performers back then, too. The previous fall was related to the belief that the Xbox One will perform poorly this holiday season, and this one came following the announcement that the company is purchasing Nokia's handset business and the rights to the company's patents for the next 10 years for $7.2 billion. This move will give Microsoft not only the software to run a smartphone but now the smartphone hardware. Many investors are debating whether this was a good or bad move by Steve Ballmer, who has already announced he will be leaving the company within the next 12 months. This development will surely put the new CEO in a tough position.

Verizon , meanwhile, lost 2.19% this past week after the company announced over the holiday weekend that it had come to an agreement to purchase the 45% stake Vodafone owned of Verizon Wireless. While on the surface that sounds like great news -- full ownership, full profit retention, full control -- it will cost Verizon $130 billion for all those things, and the company will rack up enough debt to prevent it from pursuing other growth opportunities for some time. That's probably what scared investors off.

Finally, Home Depot lost 2.4% last week despite the Mortgage Bankers Association's report that mortgage applications rose 1.3% two weeks ago. The data came in as interest rates again rose this week, which could hamper home sales and slow Home Depot's revenue growth as the flow of new customers also slows down. Some will argue that the company can continue to grow sales as new homeowners update their properties to fit their personalities and others spruce up their houses to get ready to put them on the market. I think there's some merit to those arguments, but eventually more homes will have to move on the market for Home Depot to see an uptick in revenue.

The other Dow losers this week:

(For more information on why shares of the other losers fell lower this past week, click on the following links.)

  • Wal-Mart, down 0.53%

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Fool contributor Matt Thalman owns shares of Microsoft and JPMorgan Chase. 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.The Motley Fool recommends Home Depot, Procter & Gamble, and Vodafone Group and owns shares of JPMorgan Chase and Microsoft. 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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