Prizer Inc. (PFE), Wal-Mart Stores, Inc. (WMT), And How Some Missed the Dow (.DJI)’s Near Record Run

The stock market finished out April on a strong note, with the S&P rising to a new all-time record high on optimism that earnings season is going well and that the economic recovery is proceeding at the perfect pace to encourage continued support from central banks around the world. The Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI) fell just short of a new record of their own, but the average managed to add 21 points on the day.

But among the celebrations were some pockets of bad news. As I discussed earlier today, Pfizer Inc. (NYSE:PFE) was the biggest loser on the Dow, falling 4.5% after posting weaker-than-expected earnings. Consumer stocks The Procter & Gamble Company (NYSE:PG) and Wal-Mart Stores, Inc. (NYSE:WMT) were also weak, however, with Procter & Gamble Company (NYSE:PG) losing more than 1% and Wal-Mart declining almost 1%. Barron’s commentator Brendan Conway noted this morning that both Pfizer Inc. (NYSE:PFE) and The Procter & Gamble Company (NYSE:PG) are favorites among low-volatility ETFs, which have gained in popularity among risk-averse investors seeking protection from a possible future market decline. Wal-Mart Stores, Inc. (NYSE:WMT) is also a major holding in those ETFs, and as more investors have gravitated toward low-volatility stocks, their shares have gotten more expensively valued — paradoxically leading them to have much more dangerous risk profiles than most investors recognize.

Beyond the Dow Jones Industrial Average 2 Minute (INDEXDJX:.DJI), Pitney Bowes Inc. (NYSE:PBI) plunged more than 15% after a disappointing earnings report that led the company to cut its dividend by 50%. Even though the stock will still yield more than 5%, the cut puts an end to Pitney Bowes Inc. (NYSE:PBI)’ 30-year streak of annual dividend increases. Analysts had predicted for months that the dividend might need to be cut, but the company had foiled bearish investors for a long time before finally succumbing today.

Lastly, Nuance Communications Inc. (NASDAQ:NUAN) took an 18% haircut after the voice-recognition specialist reported weak sales and net income. Nuance Communications Inc. (NASDAQ:NUAN), which is responsible for the Siri iPhone feature, isn’t the first smartphone-related company to suffer from weakness in the industry, and today’s report may add one more piece of evidence pointing to a larger-scale slowdown for smartphone sales as penetration rates start to approach saturation in many markets.

The article Why These Stocks Missed the Dow’s Near-Record Run originally appeared on Fool.com 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 Nuance Communications and Procter & Gamble and owns shares of Nuance Communications.

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