McDonald’s, BAC a Drag on Dow Jones

The Dow opened sharply lower Friday morning, dropping about 170 points to fall
under 11,128, a loss of about 1.5%. Investors had plenty to be worried about.
President Barack Obamas $447 billion plan to create jobs was poorly received and
has no support from the Republican-controlled House of Representatives. A key
U.S. Senator, John Kyl, R-Arizona, threatened to leave the debt commission panel
if military spending was reduced. A top officials departure from the European
Central Bank threatened any resolution of the continents debt crisis. Also,
Federal Reserve Chairman Ben Bernankes speech Thursday afternoon did not offer
the help Wall Street was hoping for the U.S. economy. For the past five days of
trading, the Dow Jones Industrial Average is down more than 3.1%. Not a single
stock on the Dow Jones Industrial Average was up in early-morning action.
McDonalds (NYSE: MCD ) was down more than 4%, or around $4, to under $85. The
Golden Arches were drooping over Wall Street as August sales did not increase as
much as anticipated, particularly in Asia. Still, McDonalds is up about 10% for
the quarter and more than 22% for the year. With its strong dividend and solid
franchise, McDonalds increasingly is being considered a safe-haven stock for
investors seeking stability. Bank of America (NYSE: BAC ) was down along with
the rest of the financial sector, dropping about a dime per share, or about
1.5%, to around $7.10. Massive layoffs of about 40,000 are being considered .
Yesterday, Bank of America announced it would close about 600 branches. Bank of
America is down almost 50% year to date. JMP Securities and Guggenheim Partners
both cut earnings estimates for Bank of America this morning. Another highly
regarded stock, JPMorgan (NYSE: JPM ), was off more than 2% early, losing almost
$1 per share to trade around $32.70. JPMorgan has a high percentage of problem
mortgages. With the economy slipping, its credit card portfolio also could
become a drag on earnings. JPM is down about 10% for the week and 20% for the
year. Pfizer (NYSE: PFE ) was down almost 3%, losing more than 50 cents to fall
under $18.30 per share. Johnson & Johnson and Bayer just won an FDA panels
approval for a stroke-preventing drug to compete with Pfizers. For the year,
Pfizer is up almost 17%. It was upgraded to a buy by Argus on Aug. 10 and
Standpoint Research on Aug. 5. General Electric (NYSE: GE ) was off another 2%,
about 30 cents, to trade for less than $15.30 per share. Concerns about growth
in Europe were bringing GEs shares down. General Electric has lost more than 4%
per share for the week and more than 21% for the past six months. Down about 3%,
or 70 cents, to under $23.20 was Hewlett-Packard (NYSE: HPQ ). The announced
restructuring of the company continues to plague Hewlett-Packard. Since the
company announced in mid-August that it would spin off or sell its personal
computer division, the stock has lost almost 25%. RBC Capital Markets downgraded
HPQ on Aug. 25. Jonathan Yates does not own any of the stocks mentioned in this
article.