The Dow Jones Industrial Average has badly lagged the Nasdaq in 2020, and these DJIA dogs are a big reason why. The worst-performing Dow Jones stocks so far this year are Boeing (BA), Exxon Mobil (XOM), JPMorgan Chase (JPM), Raytheon Technologies (RTX) and Walgreens Boots Alliance (WBM) as the coronavirus pandemic turns the U.S. economy inside out.
XWith people staying home, fuel prices and aviation demand have plummeted. The forced closure of businesses, and the millions of job losses that resulted, has pulled interest rates lower and threatened banks as customers risk falling behind on their bills.
Boeing Stock Trails All Other Dow Jones Stocks
Boeing stock is down 40% so far this year, making it the biggest laggard of all the Dow Jones stocks. BA stock has a weak 6 Composite Rating. Its EPS Rating, which measures accelerating profits, is also at 6.
The coronavirus pandemic has forced thousands of layoffs and big production cuts for the jet maker as air-travel demand dries up. The airlines that buy Boeing's planes have parked jets and canceled flights due to worldwide travel restrictions. Airline executives and analysts have pegged the recovery time for the airline industry at three to five years.
Before the pandemic took hold, the Dow Jones aerospace giant was grappling with the continued grounding of its once-popular Boeing 737 Max jet, after two fatal crashes. The groundings led to investigations and reports that raised questions about the company's due diligence.
However, Boeing stock shot up 14% in Monday's stock market trading, as 737 Max flight began certification flights.
Exxon Mobil Stock
Behind Boeing is Exxon Mobil stock, which has fallen 36.5% so far this year. Shares of the oil giant have a 3 Composite Rating and a 26 EPS Rating. Exxon stock was up 1.7% on Monday.
As the coronavirus pandemic weighed on oil demand, the plunge for Exxon stock this year came after talks between OPEC and Russia to cut oil production collapsed. Oil prices made their biggest drop since the Gulf War. OPEC and other nations later agreed to slash output.
Fellow DJIA energy giant Chevron (CVX) is down 27% so far this year, making it the sixth-worst-performing Dow Jones stock in 2020.
Exxon stock rose 1.9% on Monday. The stock was trying to regain support at its 50-day line.
JPMorgan Stock
The third-worst Dow Jones stock of 2020 is JPMorgan Chase, the largest U.S. bank by market value. JPMorgan stock has fallen 33% so far this year.
As the coronavirus forces the Federal Reserve deeper into stimulus mode, the central bank has its key interest rate near zero — threatening profitability for JPMorgan and other banks. JPMorgan in April said that it set aside an extra $6.8 billion to handle loans gone bad in the first quarter.
The Federal Reserve last week, in publishing results for its annual stress tests, said that most banks were strong enough to handle the pandemic's shock to the economy. But the central bank ordered banks to halt share buybacks and dividend payments in the third quarter in an effort to keep banks' pockets deep enough to handle any sharp turns in the economy.
JPMorgan stock was up 0.9% on Monday. The stock has a 40 Composite Rating and a 72 EPS Rating.
Raytheon Stock
Raytheon Technologies, the fourth-worst performer on the Dow, is down 30% year to date. Shares of the aviation company, the product of a merger between Raytheon and United Technologies' aviation segment, have a 34 Composite Rating and a 64 EPS Rating.
The troubles at Boeing and the airlines have rippled through to the Raytheon, which makes engines for Boeing and Airbus (EADSY). Raytheon's big Collins Aerospace business — which makes seats, lights and other gear for the 737 Max — was also likely to suffer on the bottom line due to troubles with the jet.
"Commercial aerospace has been particularly hard hit," CEO Greg Hayes said in a message to employees in April. "Airline travel in the U.S. alone is down 96%, and we are seeing similar trends globally. Our commercial business partners have begun dramatically scaling back on their operations in order to preserve capital and protect the long-term needs of their businesses, and now we must do the same."
Raytheon stock was up 3.4% on Monday.
Walgreens Boots Alliance Stock
Walgreens Boots Alliance has fallen 28% so far this year, the fifth-worst performance among Dow Jones stocks. Shares of the drugstore chain were up 1.8% on Monday.
The company, in April, said that "we are now seeing declining sales trends, especially in quarantined areas," after a rush to stock up during the first three weeks of March.
"While it is difficult to predict future sales, realistically, we expect to see future de-stocking by our customers and short-term sales may be negatively impacted by lower foot traffic," CFO James Kehoe said on the company's earnings call at that time. "This is particularly evident in discretionary categories such as beauty and photo as customers redirect spending to everyday essential categories."
Walgreens stock has a 38 Composite Rating and a 71 EPS Rating. WBA stock is on track to be the second quarter's worst-performing Dow Jones stock.
Worst Dow Jones Stocks For The Second Quarter
After Walgreens stock, the worst DJIA performers of Q2 are Merck (MRK), Pfizer (PFE), Coca-Cola (KO) and Verizon (VZ).
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2020-06-29 20:37:39Z
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