Hewlett-Packard Company (HPQ), McDonald’s Corporation (MCD), Caterpillar Inc. (CAT): Markets Continue to Slide on Fed-Induced Fears

My colleague Dan Caplinger noted this morning that the markets are trading lower on little negative news, but the fresh memory of Ben Bernanke’s testimony and the prospect of reduced Fed bond-buying are weighing on investors’ minds. The fear that cheap money will soon be a thing of the past is likely what’s causing the markets to drop today.

As of 12:45 p.m. EDT the Dow Jones Industrial Average has fallen 31 points, or 0.2%, to 15,263. The S&P 500 is down by 0.36%, and the NASDAQ has fallen 0.3%. Let’s take a look at a few of the Dow’s biggest losers today.

Shares of Hewlett-Packard Company (NYSE:HPQ) are down 2.3% this afternoon. Shares rose 17.1% yesterday after the company announced expectation-beating quarterly earnings, and today’s decline likely owes to nothing more than profit-taking. Yesterday’s jump was enough to make many market participants consider selling, but because the stock is up 70.9% year to date, the move to lock in profits is a no-brainer for investors who are in it for short-term gains. For long-term buy-and-hold investors, today’s move lower should be of no concern. So long as the quarterly report met your expectations, continue to hold on, because this stock will likely be in for a bumpy ride the next few quarters.

Despite announcing a $0.77 per-share quarterly dividend yesterday, McDonald’s Corporation (NYSE:MCD) is down 1% today. However, shares could be moving lower because of news from yesterday: During the company’s annual shareholder meeting, CEO Don Thompson had to defend his company against comments that McDonald’s Corporation (NYSE:MCD) food is contributing to the obesity problem in America. Some critics have even pointed out that the company’s marketing strategy — including its mascot, Ronald McDonald — has contributed to childhood obesity.

Caterpillar Inc. (NYSE:CAT) may still be on investors’ bad side: Shares have fallen 0.9% today, even though the Department of Commerce reported a 3.3% increase in orders for manufactured goods. Although today’s report indicates the U.S. economy is growing stronger, yesterday’s Chinese industrial-purchasing numbers were weak, and in order for Caterpillar Inc. (NYSE:CAT) grow, the company needs a number of major markets to be healthy. Investors already have low expectations for Europe, but now that China is weakening, projections for Caterpillar Inc. (NYSE:CAT) revenue and profit may soon decline

The article Markets Continue to Slide on Fed-Induced Fears originally appeared on Fool.com and is written by Matt Thalman.

Fool contributor Matt Thalman has no position in any stocks mentioned. The Motley Fool recommends McDonald’s. The Motley Fool owns shares of McDonald’s. Check back Monday through Friday as Matt explains what caused the Dow’s winners and losers of the day, and every Saturday for a weekly recap. Follow Matt on Twitter: @mthalman5513.

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