Morning Dow Report: Market Drops 75+ as Cisco, Intel Fall; Wal-Mart Gains

Morning Dow Report: Market Drops 75+ as Cisco, Intel Fall; Wal-Mart Gains

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.

In the first trading session of 2013, the Dow Jones Industrials roared to a gain of more than 300 points. 2014 isn't giving investors the same bump, though, with markets falling out of the gate and the Dow down 90 points at 11 a.m. EST after having dropped by triple-digits earlier in the morning. Leading the way downward for the Dow were tech giants Intel and Cisco Systems , but arguably more interesting is the fact that Wal-Mart is the big winner in this morning's trading.

Neither Cisco nor Intel had any market-moving news to justify drops of about 2% this morning, so the more likely cause involves investors rebalancing their portfolios to take advantage of the beginning of the new tax year. Even though Intel gained 26% during 2013, many investors remain dubious of the chip giant's ability to make a successful transition away from the declining PC industry toward the higher-growth mobile-chip market. Even if the death of the personal computer has been overstated, and Intel can continue reaping profits from PC sales for years to come, the company will nevertheless ultimately need to find a long-term strategy to sustain its leadership position in the semiconductor industry.

Cisco's 2013 gain of just 14% lagged the Dow badly, and investors might finally have had enough of the networking giant's sluggish stock returns in recent years. The key concern here is whether Cisco can expand into new and lucrative areas of technology while still maintaining its strength in its core networking infrastructure business. The company has struggled with that balancing act. With tech giants throughout the industry aiming at the promise of cloud computing and other information technology infrastructure plays, Cisco needs to convince shareholders that it can do a better job of defending its turf than it has in the past.

Wal-Mart gained three-quarters of a percent as the big winner in the Dow so far today. The retail giant said after the market closed on New Year's Eve that it would offer free prescriptions to Obamacare enrollees even if they hadn't yet gotten their plan identification information from insurance companies. Wal-Mart's prescription business has given traditional drugstores headaches, but another reason the stock could be rising is that investors might expect a turnaround from the ailing retailer. If the recovery starts to slow down from its recent growth, then Wal-Mart might be a play on consumers having to pull back and economize, returning to discount retail from higher-priced alternatives that have done well in recent years.

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