Will Tuesday's Stock Market Carnage Already Be Forgotten About on Thursday?

If the international markets did not echo the U.S. market drop, and if the United States is still the safest game in the major economies, maybe Tuesday really was an overly exaggerated sell-off that was too drastic. That said, who knows what Thursday’s news flow will bring. And if you have read 24/7 Wall St. for very long, you have been told over and over that the so-called Efficient Market Hypothesis is simply a wonderful theory based on fancy and not based on reality. Ask yourself this: Have the markets really been good at factoring in any major events in the last few years?

Where some of the carnage was most evident was in the top index stocks on Tuesday. Some of these drops were significantly worse than the broader markets. Unfortunately, that may not assure a serious snapback rally on Thursday when U.S. markets reopen, but some of the major losses in the top stocks driving the market seemed more than excessive. Here were the losses seen in the top Dow stocks, with weightings included, that need to be looked at rather closely when Thursday’s trading begins after Wednesday’s rare market closure:

  • Boeing Co. (NYSE: BA) was down 4.85% at $342.50, a drop of 17.46 points. It is the top Dow weighting, with about 9.3% of the index’s weighting. Boeing’s share volume of 5.2 million shares trading hands was about 25% higher than its average volume.
  • UnitedHealth Group Inc. (NYSE: UNH) is now the second highest Dow weighting at over 7.5%, and it was down 2.7% ($7.78) at $278.55. Its volume of over 4.6 million shares was about one-third higher than normal.
  • 3M Co. (NYSE: MMM) still has roughly 5.5% of the Dow’s weighting, and its share fell by 3.14% (−$6.56) to $202.20. Trading volume was not higher than normal at almost 2.7 million shares.
  • Goldman Sachs Group Inc. (NYSE: GS) has seen its problems continue, and its weighting in the Dow is down to barely under 5%. Its shares fell $7.32, or 3.8%, to $184.31, and the trading volume of almost 5.8 million shares was about 66% higher than normal.
  • Apple Inc. (NASDAQ: AAPL) has seen its weight in the Dow come down to about 4.8%, but the mighty Apple shares fell by $8.13, for a 4.4% loss, down to $176.69 on Tuesday. Its 41.3 million shares trading hands was only about 10% above normal.
  • Home Depot Inc. (NYSE: HD) was down 3.5%, or $6.44, at $175.30, and the 5.06 million shares traded on Tuesday was only about 20% above normal.

Several defensive stocks were actually higher or hardly fell on Tuesday, as many investors know they should go “hide out” in the safest stocks that might not have to worry about mere economic blips and macro news as the technology, finance, industrials and other cyclical plays. McDonald’s Corp. (NYSE: MCD) is defensive by nature, and it has a 5% weight in the Dow, but it was down only about 0.1%. And American Water Works Co. Inc. (NYSE: AWK), the ultimate safety trade in water utilities, actually posted a tiny gain on Tuesday. And shares of Procter & Gamble Co. (NYSE: PG) were down a mere one cent at $93.31 on Tuesday during the market carnage. Duke Energy Corp. (NYSE: DUK) squeezed out a $0.43 gain (0.48%) to $90.05, and its shares even hit a 52-week high.