Why the Dow Plunged Below 14,000 This Morning: The Travelers Companies, Inc. (TRV), Oracle Corporation (ORCL), Herbalife Ltd. (HLF)

The Dow Jones Industrial Average got a lot of attention over the weekend after pushing beyond the 14,000 level for the first time in more than five years on Friday. But what the market gives, the market often takes away, and the Dow’s latest milestone proved to be short-lived when the average posted triple-digit losses this morning. Most commentators are blaming concerns about Europe’s economy and a slightly weaker U.S. factory-orders report, but after the market’s huge gains in January, the pullback could well be caused by traders taking profits and running. At 10:45 a.m. EST, the Dow is down 110 points, or 0.8%, while the broader market measures fell a bit less in percentage terms.

The Travelers Companies Inc (TRV)Within the Dow, The Travelers Companies, Inc. (NYSE:TRV) was the biggest decliner, falling more than 2%. Although the company posted smaller losses related to Hurricane Sandy than many had feared, the real long-term question is whether Travelers will be able to hike rates further in order to compensate for possible losses in the future. Inevitably, competitive pressures restrict how much any single company can boost rates, and that may be one reason why investors are backing away from the stock after it hit all-time highs last week.

Elsewhere, Herbalife Ltd. (NYSE:HLF) plunged 6.4% after part of Bill Ackman’s bear case started playing itself out: Reports say the Federal Trade Commission is investigating the company. Since giving his justification for a massive short position in Herbalife, Ackman has created a hedge-fund battle royale, with activist investors Carl Icahn and Third Point’s Dan Loeb taking the bullish view of the stock. Ackman alleged that Herbalife is a pyramid scheme and called on the FTC and other regulators to take action against the company, so fear of that very action has pushed shares down today.

Finally, Acme Packet, Inc. (NASDAQ:APKT) soared 22% after Oracle Corporation (NASDAQ:ORCL) agreed to buy the communications equipment company. The move is an interesting one for Oracle, as Acme’s equipment focus is a bit of a departure for the software giant. Still, with Oracle trying to join the crowd of tech giants delivering one-stop solutions for clients, Acme would give it an essential component in providing customers with what they need.

The article Why the Dow Plunged Below 14,000 This Morning 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 Acme Packet. The Motley Fool owns shares of Oracle and has options positions on Herbalife.

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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
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

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!