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

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

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!