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Alcoa Inc (AA), International Business Machines Corp. (IBM): Challenges Could End the Dow (.DJI)’s Record Run

Lately, whenever stock markets have appeared on edge, the solution has involved central bank intervention. Today, it was the Bank of Japan’s turn to add some stimulus to the global economy, with an ambitious program of asset purchases and monetary expansion in an attempt to stem the decades-long negative impact of deflation on the island nation’s economy. The greatest impact from the move came in Tokyo, where the Nikkei reversed an early slump to rise more than 2%. But even as European stocks slumped, the Dow Jones Industrials Average (Dow Jones Indices:.DJI) managed to take the BOJ’s move and build on it, climbing more than 55 points.

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International Business Machines Corp. (NYSE:IBM), though, fell 0.6%, which made it the biggest loser in the Dow on a percentage basis. As numerous Fool contributors have noted earlier today, Oracle Corporation (NASDAQ:ORCL) scored a big win in its challenge to International Business Machines Corp. (NYSE:IBM)’s strategy of dominating the Big Data market, when a study showed that Oracle Corporation (NASDAQ:ORCL)’s technology performed better than International Business Machines Corp. (NYSE:IBM)’s. As troubling as that is for Big Blue, it ordinarily wouldn’t have a big impact on the broader stock market. But because International Business Machines Corp. (NYSE:IBM)’s share price is so high, it has a disproportionately heavy weighting in the price-weighted Dow Jones Industrials Average (Dow Jones Indices:.DJI). As a result, if International Business Machines Corp. (NYSE:IBM) can’t resolve its problems, a stock decline could make it very hard for the Dow to advance overall.

Alcoa Inc (NYSE:AA) also fell 0.6% as investors prepare for the aluminum company to open the official earnings season on Monday. Despite persistent weakness in aluminum prices, the company is well-positioned to take advantage of rising demand for aircraft, automobiles, and other industrial applications. As Fool analyst Taylor Muckerman noted earlier today, Alcoa’s active attempts to streamline and optimize its business should prepare it to benefit greatly from the next cyclical upturn, even if the company goes through more pain in the short run.

Finally, Greenbrier Companies Inc (NYSE:GBX) fell more than 4% after beating earnings estimates, but falling well short on overall sales. The railroad-services company said that deliveries fell 27% during the quarter, leading to a decline in revenue of nearly 8%. Perhaps, more importantly, Greenbrier Companies Inc (NYSE:GBX) shareholders seemed dissatisfied with the way the company has moved forward after rejecting a merger bid with American Railcar Industries, Inc. (NASDAQ:ARII) that activist investor Carl Icahn had tried to broker. Even with expectations of better sales ahead and a cheap valuation, Greenbrier Companies Inc (NYSE:GBX) can’t seem to inspire confidence among investors.

The article IBM’s Challenges Could End the Dow’s Record Run originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool owns shares of IBM and Oracle.

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