Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Alcoa Inc (AA), Johnson & Johnson (JNJ), The Home Depot, Inc. (HD): Why These Dow Stocks Are Falling Behind Today

Although we don’t believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes — just in case they’re material to our investing thesis.

The Dow Jones Industrials are having another strong day today, posting gains of 61 points as of 12:30 p.m. EDT and aiming to reverse yesterday’s modest losses to post a fourth winning day for the week. Broader markets haven’t gained as much as the Dow on a percentage basis, but overall, it seems as though investors are looking forward to favorable resolutions in a couple of major areas of uncertainty: the Fed’s future course of monetary policy and the geopolitical situation in the Middle East.

Alcoa Inc (NYSE:AA)

But even with the Dow’s solid gains, a few components are on the losing side of the market at midday. Alcoa Inc (NYSE:AA) has posted the most substantial losses, falling 1.2% as investors start to anticipate its imminent exit from the Dow at the end of next week. In the absence of news to the contrary, the aluminum market continues to be a perform poorly, even within the hard-hit commodities sector, with large stockpiles and industry overcapacity making it likely that Alcoa Inc (NYSE:AA) and its peers will suffer continued low prices for the light, durable metal for years to come.

Johnson & Johnson (NYSE:JNJ) has dropped 0.8% after a New York Times article yesterday highlighted new concerns about recalls of popular products. Johnson & Johnson (NYSE:JNJ) has suffered repeated incidents requiring recalls in the past several years, raising more concerns about general quality control and the potential negative impact on the company’s brand. As J&J considers selling off its Ortho clinical-diagnostics division, it will only increase the importance of maintaining the reputation of its remaining core businesses.

Finally, The Home Depot, Inc. (NYSE:HD) has fallen modestly, posting a 0.3% decline. After the company weighed in on proposals in the District of Columbia to raise the city’s minimum wage for certain big-box stores to $12.50 per hour, the home improvement retailer might owe some of today’s losses to the decision of California lawmakers to boost the state’s minimum wage from $8 to $10 per hour by 2016. The Home Depot, Inc. (NYSE:HD) has done a good job in recent years of weathering the difficulties of the weak housing market, but any potential rise in labor costs could crimp margins and threaten profit growth — especially if the trend toward higher minimum wages leads to wage increases even among higher-paid workers.

The article Why These Dow Stocks Are Falling Behind Today originally appeared on 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 Home Depot and Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.