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.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

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!