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Fear Slams the Dow As Intel, Verizon Salvage Minimal Gains


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The Dow Jones Industrials got hit hard Tuesday, falling almost 130 points after trade data called into question whether the U.S. economy will recover as quickly from its winter-induced slowdown as investors had hoped. Moreover, with geopolitical concerns on the rise and ongoing nervousness about the state of the global economy in key international markets, the Dow Jones Industrials are having a harder time staying near record highs. But even on a big losing day, Intel and Verizon posted small but still positive returns on the day.

Source: Intel.

For Intel, today's three-penny gain came as the company unveiled a new set of Chromebooks, with a wide variety of different hardware companies planning to offer the devices to customers by the end of the year. Chromebooks have emerged as a key entry-level computing device, with lean hardware that meets the needs of low-demand users who primarily want Internet surfing capability. By targeting Chromebooks, Intel can take advantage of its prowess in the PC laptop arena while also helping take Chromebook performance up a notch. More broadly, Intel hopes that by making a firmer push into up-and-coming devices, it can position itself to get a greater foothold in the mobile and wearable computing arena, where most of Intel's future growth potential lies. Chromebooks won't be a solution by themselves, but they could help Intel make the transition without immediately sacrificing too much in profit.

Verizon's gain of almost 0.2% was slightly more substantial, and it bucked the negative trend of all of its U.S. wireless-network rivals. One of Verizon's biggest issues is whether smaller competitors will be given preferential treatment in future government auctions of wireless spectrum, which could eat into the huge advantage that Verizon has built up with strategic purchases of spectrum over the years. Currently, the battle is a political one, with House Republicans having called for the Federal Communications Commission not to establish rules that would put Verizon and its fellow Dow telecom component at a disadvantage compared to smaller carriers. With a vote coming as early as next week, it's important for Verizon to get a favorable resolution on the issue in order to protect itself from further competition.

Investors in the Dow Jones Industrials need to remember that it has been a long time since they've seen even a normal correction in the bull market. Meanwhile, Intel and Verizon should remind Dow investors that even in down markets, some stocks can still perform well.

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The article Fear Slams the Dow As Intel, Verizon Salvage Minimal Gains originally appeared on Fool.com.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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