The past month hasn’t been great for the stock market as a whole, but it has been downright horrible for a handful of blue-chip stocks.
Most investors understand that excessive declines can be buying opportunities, but they also need to recognize that getting into a struggling stock is a bad idea. The current weakness in stocks may just be a harbinger of things to come. How do you know the difference? You dig deeper and consider the bigger picture.
With that as a backdrop, here’s a closer look at the Dow Jones Industrial AverageIt is (DJ CLUES: ^ DJI) April’s biggest losers. These may be safe bets, but that doesn’t necessarily make them great choices at the moment.
The worst of the worst of the Dow Jones
The Dow Jones Industrial Average fell 5% last month. This setback, however, does not take into account the losses suffered by some of its constituents. Actions of Boeing (NYSE:BA), International Business Machines (NYSE:IBM)And Home deposit (NYSE:HD) each fell nearly 13% in April, while the tech giant Intel (NASDAQ:INTC) saw its stock fall by more than 30%.
What went wrong?
Shares of aircraft manufacturer Boeing lost altitude throughout the month. However, its first quarter results published at the end of April finally validated this sale. Revenue fell 8% year over year as ongoing design and manufacturing problems with the new 737 and 787 planes dampened demand. The company also posted a hefty $355 million loss, reminding investors that these headaches aren’t just nuisances: They have a clear financial cost. Then there’s the added disruption of an impending CEO change. Current general manager Dave Calhoun will step down at the end of the year, but there’s already drama over who should replace him.
IBM’s setback is also mostly profit-related, although the cloud acquisition announcement software business HashiCorp didn’t help. First-quarter earnings of $1.68 per share beat estimates by $1.60, but revenue of $14.46 billion. did not meet expectations of $14.55 billion. And while most analysts are generally optimistic about integrating HashiCorp into IBM’s existing cloud software business, now may or may not be the ideal time to make such a deal. The $6.4 billion bid for HashiCorp is also rather expensive.
As for Home Depot stock, don’t blame earnings for its poor performance in April: It won’t report its first quarter numbers until mid-May. Blame the macro environment instead. Inflation proved problematic during the home improvement retailer’s fiscal fourth quarter (ended Jan. 28), causing sales to decline 3% on a year-over-year basis. But nothing has changed significantly in the meantime. In fact, the environment for construction and home improvement has deteriorated due to persistent inflation and high interest rates.
Finally, Intel stock collapsed in April in anticipation of the bad news announced with its first quarter results. Even though its revenue increased by 9% year-over-year, the chipmaker still faces considerable challenges. Its first quarter revenue of $12.7…
