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.

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

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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!