The Dow Drops But 3M Is Rallying

After making great gains early this week, the Dow Jones Industrial Average (DJI) fell on Wednesday by over 200 points, following an announcement by the Federal Reserve that it would continue to purchase $85 billion in bonds every month. This program, referred to as quantitative easing, boosts the supply of money with the goal of increasing lending and liquidity. However, the Dow dropped another 1.35%, after Federal Reserve Chairman Ben Bernanke suggested that this stimulus is likely to be gradually reduced, as the economy continues to improve. 

But whenever indices like the Dow make significant moves in either direction, it's important to note which sectors are driving these trends. In today's trading, all 30 stocks in the index fell, but the Dow was pushed down the most by technology companies like Verizon Communications Inc. (VZ) and AT&T, Inc. (T).

That doesn't mean there are no opportunities to invest in the Dow - only that savvy investors should take into account other trends besides market reactions to breaking news. 

Breaking Down The Dow

The Dow is made up of 30 stocks and represents 8 sectors. We decided to see which sectors have been outperforming recently - comparing their performance over the last week, month and quarter.

Based on the criteria of our screen, only one sector of the Dow - conglomerates - was found to be outperforming in the the last week, month, quarter and year-to-date. This wasn't surprising considering the conglomerates sector of the Dow contains just one company - 3M Co. (MMM). 

3M Co. At A Glance

Interactive chart: Click on the different date ranges to see changes in price over time.

 

<p>Your browser does not support iframes.</p>

3M Co. (MMM, Earnings, Analysts, Financials): Operates as a diversified technology company worldwide, with six segments: Industrial and Transportation; Health Care; Consumer and Office; Safety, Security and Protection; Display and Graphics; and Electronics and Communications. 

Market cap at $78.07B, most recent closing price at $112.97.Performance over the last week: 2.33%Performance over the last month:  0.43%Performance over the last quarter: 6.20%

Returns since 5/20/13: 0.43%; compared to Johnson & Johnson (JNJ) (-2.85%), Tredegar Corp. (TG) (4.72%) and Nacco Industries Inc. (NC) (7.62%).

The company's most recent earnings report, for the quarter ending 5/31/2013 featured earnings of $1.61 per share, which is 1.3% higher than the same quarter last year. Analysts expect the company to report earnings of $1.71 for the next quarter. And shareholders received $440 million in cash dividends during that time period. 

The Health Information Systems division at MMM recently announced an easy-to-use Computer Assisted Coding (CAC) tool for rural and community-based hospitals. The software is an add-on module to the company's Coding and Reimbursement System, utilized by over 5,000 healthcare groups across the globe, and is expected to be available in the fourth quarter of 2013. The new product will simplify clinical documentation, helping to speed up the coding process and making it easier to spot gaps in information and generate reports. 

The company's Critical & Chronic Care Solutions Division recently released two new products, 3M™ Cavilon™ Bathing & Cleansing Wipes and 3M™ Cavilon™ 3-in-1 Total Care Cloths. Both help clinicians address the needs for efficacy and efficiency in incontinence care applications, especially regarding the development of Incontinence-Associated Dermatitis (IAD). IAD reportedly occurs in 42% of hospitalized adults who are incontinent, and nearly 95% of incontinent patients in intensive care units.

 

(By Emily Smykal)

Articles