It’s been an explosive start to the year for the Dow Jones Industrial Average . Despite all the fears in December over slowing economic growth and the fiscal cliff, the Dow has soared to a gain of more than 3.3% over the course of January to approach new all-time highs.
That doesn’t mean every stock on the Dow has had a great start to the year, however. Two big names on the blue-chip index have failed to capitalize on the bullish run. Let’s see which Dow stocks couldn’t keep pace with the index last month.
January’s flawed five
Surprisingly, January’s worst Dow member was 2012’s best blue chip. Despite gaining more than 100% last year, Bank of America Corp (NYSE:BAC) couldn’t keep up the optimism, as shares fell 2.5% in January. The slight contraction in the U.S. economy certainly didn’t help bank stocks earlier this week, and B of A’s earnings contributed to the disappointment. While most analysts had expected a bad quarter, investors still shrank away from the massive blow that B of A’s mortgage business dealt to revenue and profit.
Not to miss out on the losses, The Boeing Company (NYSE:BA)‘s stock also fell in January, down 2% thanks to the problems of the now-infamous 787 Dreamliner earlier in the month. Investors fled the aerospace giant’s shares at the first sign of trouble, but things have progressively gotten worse since then. Now, with investigators pouring over data regarding the plane’s faults, the aircraft fleet’s grounding could go on for months — not what Boeing or its investors wanted to hear about the company’s newest jet. Don’t expect any sort of stability from this stock as the saga goes on; bits of news will likely be enough to send shares bouncing wildly in either direction.
Bank of America and Boeing were the only two Dow stocks to record losses during the first month of 2013, but several other Dow members underperformed the index at large. UnitedHealth Group Inc. (NYSE:UNH)‘s stock managed to rise just 1.8% to rank as the Dow’s third-worst member in January. The company released a decent earnings report in which it grew revenue by more than 11% last quarter while keeping costs down — yet shares fell anyway. Still, with the company looking to increase its stake in Brazilian insurer Amil Participacoes in the first half of this year and adapting fairly well to the new insurer rules from Obamacare, don’t expect UnitedHealth to stay sluggish for too long.
Alcoa Inc. (NYSE:AA) and Verizon Communications Inc. (NYSE:VZ) round out the worst five stocks of the Dow in January, with shares gaining just 1.8% and 2%, respectively, for the month. No investor can complain about that, but with some of the Dow’s other members absolutely crushing the past month (including a stock I wouldn’t recommend to anybody, Hewlett-Packard Company (NYSE:HPQ), which gained nearly 16% in January), Alcoa and Verizon’s gains don’t seem so substantial.
Nonetheless, it’s been a great start for the Dow so far in 2013. And even with these stocks unable to capitalize fully on the Dow’s gains, only Boeing and Bank of America have actually lost anything to start the year. Let’s hope the markets continue this rosy trend.
How can you capitalize on the rise?
Bank of America hasn’t had the start to 2013 that investors wanted, but this stock has still been on a tear over the past few years. Is it still worth your buy, or should you stay away? To learn more about the most talked-about bank out there, check out our in-depth company report on Bank of America. The report details Bank of America’s prospects, including three reasons to buy and three reasons to sell. Just click here to get access.
The article January’s Worst Dow Stocks originally appeared on Fool.com and is written by Dan Carroll.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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