The Boeing Company (BA), Caterpillar Inc. (CAT): Last Week’s Worst Performing Dow Components

Despite a few big losers this past week, which we’ll get to in a moment, the major indexes all performed really well during the past five trading sessions, and the Dow Jones Industrial Average even set a new all-time closing high on both Thursday and Friday. The blue-chip index closed on Friday at 15,464, after gaining 328 points, or 2.17%, this past week. The S&P 500 outperformed the Dow, by rising 2.96% over the past five days, but it was beaten by the Nasdaq, which increased by 3.46%.

The main stimulant for the rise came after the markets closed on Wednesday, when Federal Reserve Chairman Ben Bernanke held a press conference in which he reassured investors that the central bank’s accommodative policies would continue for the foreseeable future.

Before we hit the Dow losers, let’s look at this week’s best-performing component: Caterpillar Inc. (NYSE:CAT). After being one of the biggest losers for two weeks, with the stock declining 0.42%, shares of Caterpillar rose 6.12% this past week. Many analysts have contributed Caterpillar’s rising share price with rising gold prices this week. As concerns about inflation creep into investors’ minds, gold is seen as a safe haven and a shield against losing buying power, and increasing precious-metal prices help mining companies and mining equipment manufacturers such as Caterpillar. But despite a strong one-week performance, shares of Caterpillar are still down 2.72% year to date.

The big losers
Going into Friday, shares of The Boeing Company (NYSE:BA) were higher for the week by 2.57%, but that all quickly changed on Fridat at around noon ET, when reports hit the news wires about a Boeing 787 Dreamliner on fire at London’s Heathrow Airport. Shares of the aircraft manufacturer initially fell more than 7% on Friday but closed the day down 4.69%, leaving the company as the worst performing Dow component of the week, as shares lost 2.23% for the past five trading sessions. While initial reports don’t clearly specify what caused the fire on the 787, since the plane has a very short history with a number of malfunctions and one previous fire caused by the battery system, many investors feared for the worst and quickly dumped their shares.

Another stock that was just slightly lower going into the last day of the week but ended with a terrible Friday was Verizon Communications Inc. (NYSE:VZ), which lost 1.73% over the past five trading days had 1.56% of that decline come on Friday alone. The main cause of the decline was a Moffett Research analyst’s belief that the wireless company’s commitment with Apple Inc. (NASDAQ:AAPL) — through which Verizon would sell $23.5 billion worth of iPhones during the year — won’t be upheld. Moffett thinks Verizon will sell only around $14 billion worth of iPhones during 2013, which easily misses the lofty sales figures it had agreed to. While it’s unknown what penalty, if any, Apple would enforce, the fact is that Verizon may not hit its sales goals and therefore may miss forecasted revenues and profits for the remainder of the year.

After losing 1.46% this past week, shares of International Business Machines Corp. (NYSE:IBM) ranked as the third worst performing Dow component of the week. The biggest decline came on Tuesday, when the stock fell 1.88% after Goldman Sachs Group, Inc. (NYSE:GS) downgraded the stock from a “buy” to “neutral” and cut its price target from $220 to $200. The Goldman analyst responsible for the move was Bill Shope, who cited increasing pressure in emerging markets. IBM currently relies on such areas in its five-year growth plan for roughly $17 billion in revenue. This is certainly something current shareholders will need to keep an eye on, and if Shope is wrong, the stock may realize a nice move higher.