Dow Drops 50 as Some Stocks Show Weakness
With very little economic news released today, earnings season officially kicking off tomorrow, and the Dow Jones Industrial Average gaining 497 points, or 3.84%, last week, traders gladly took some profits off the table today. During the regular trading session, the index dropped 50 points, or 0.38%.
Of the Dow's 30 components, 17 of them ended the trading day in the red. This afternoon, I explained why three of the biggest Dow losers were Walt Disney , Bank of America , and Boeing . To read about what negative news helped push these companies lower, click here, or stick around to learn about the outside forces that affected the stock prices of Alcoa , ExxonMobil , and Chevron .
So what happened?
Shares of one of the world's largest aluminum producers, Alcoa, dropped by 1.73% today. The company is set to announce fourth quarter earnings tomorrow, and analysts are expecting earnings per share to fall in the area of $0.06. This estimate has been reduced a number of times over the past few months and, if Alcoa misses this mark, shares will fall dramatically. Today's move lower was likely caused by traders taking profits before the companies earnings announcement, because the stock had risen more then 4.2% in just the first three trading days of 2013.
The oil industry took a big hit today, after one analyst from Raymond James Financial made a prediction that the per barrel price of oil will average $65 in 2013. The analyst cited the U.S. oil supply has grown rather robustly over the past few years, and it's believed that this trend will continue, while the demand for oil in the U.S. is not growing as quickly. Shares of both Dow oil companies fell on the news during today's trading session: ExxonMobil ended the day down 1.16%, while Chevron closed lower by 0.68%.
Another small factor weighing on ExxonMobil today was the announcement that the U.S. Supreme Court would not hear Exxon's appeal to a case in which the company has been found guilty and owes $70 million. Although in the big picture, the amount Exxon was fined is rather small, this case could open more doors to possible new lawsuits against the oil giant.
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The article Dow Drops 50 as Some Stocks Show Weakness originally appeared on Fool.com.Matt Thalman owns shares of Bank of America Corp. and Walt Disney. Follow Matt on Twitter @mthalman5513. The Motley Fool recommends Chevron Corp and Walt Disney. The Motley Fool owns shares of Bank of America Corp, ExxonMobil Corp, and Walt Disney. 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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