Cisco Systems, Inc. (CSCO), Merck & Co., Inc. (MRK), The Coca-Cola Company (KO): Will These Stocks Stop the Dow’s Record Run Today?

This morning’s movements in the Dow Jones Industrials look eerily familiar to those who have been watching the day-to-day movements of the average in recent months. The stock market opened modestly lower this morning, with most blaming general concerns, rather than any specific news, for stocks’ lackadaisical open. Yet within the first couple of hours, the Dow overcame its modest decline and turned positive, climbing 15 points as of 12:45 p.m. EDT. The broader market posted similar gains, with the S&P 500 also pushing further into record territory, rising to 1,670.

Cisco Systems, Inc.But some of the Dow’s components are under pressure today. Cisco Systems, Inc. (NASDAQ:CSCO) has led the Dow’s decliners with a loss of about 1.7%, giving back some of the huge gains the tech giant posted last week. An analyst report this morning noted that despite NetApp Inc. (NASDAQ:NTAP)‘s collaboration with Cisco Systems, Inc. (NASDAQ:CSCO) on the FlexPod validated data-center platform, Cisco Systems, Inc. (NASDAQ:CSCO) was unlikely to seek to acquire NetApp. By itself, that doesn’t justify the drop in Cisco Systems, Inc. (NASDAQ:CSCO)’s share price, but it serves as a reminder that despite Cisco Systems, Inc. (NASDAQ:CSCO)’s strong earnings report last week, the industry on the whole is suffering from intense competitive pressure that isn’t likely to subside anytime soon.

Merck & Co., Inc. (NYSE:MRK) has also dropped, falling 1.4% after the FDA expressed concerns about the side effects of the company’s suvorexant insomnia drug. Citing increased daytime drowsiness and suicidal thoughts, the FDA suggested that a smaller dose might prove equally effective while reducing side effects. A panel of outside experts is expected to rule on the drug’s safety later this week, and with so much riding on Merck & Co., Inc. (NYSE:MRK)’s ability to boost its pipeline, a negative finding could hurt the company’s chances of replacing lost revenue from off-patent drugs as quickly as it had hoped.

Finally, consumer giants The Coca-Cola Company (NYSE:KO) and The Procter & Gamble Company (NYSE:PG) have both fallen more than 1%. Neither company reported significant news today, but value investors have grown increasingly concerned about the rise in both companies’ share prices relative to their earnings. Despite their reputations as defensively oriented stocks that hold up well in market reversals, their above-market multiples seem out of line with the companies’ growth prospects. With Coke facing the potential restraint of anti-obesity sentiment and The Procter & Gamble Company (NYSE:PG) still dealing with activist investors looking over its shoulder, investors in both companies may simply see better opportunities elsewhere.

The article Will These Stocks Stop the Dow’s Record Run Today? 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 recommends Cisco Systems, Coca-Cola, and Procter & Gamble.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!