Dow Plunges How Did McDonald s AT T and CocaCola Hold Firm
Post on: 16 Март, 2015 No Comment

Thursday was a nightmarish day for the Dow Jones Industrial Average ( DJINDICES: ^DJI ). which plunged 266 points to post its worst decline since early February and reversing the gains it had earned earlier in the week. But even though the Dow tumbled, McDonald’s ( NYSE: MCD ) and AT&T ( NYSE: T ) actually managed to gain on the day. Moreover, although Coca-Cola ( NYSE: KO ) wasn’t quite as lucky as those Dow components, its losses were relatively minimal. How did these three stocks escape Thursday’s carnage, and will they continue to outperform the Dow Jones Industrials going forward?
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Source: McDonald’s.
In addition, those who remember the bear market of 2008 know that some stocks contributed more to the Dow’s plunge that year than others. Remarkably, McDonald’s managed to gain almost 9% that year, and while AT&T and Coca-Cola did have dramatic losses in the 25% to 30% range, they were still markedly better than the Dow’s 34% decline.
Admittedly, these three Dow stocks have all gone through some challenges lately. For McDonald’s and Coca-Cola, growth has been hard to come by, with McDonald’s having to fight against rival fast-food companies, while Coca-Cola deals with a growing movement away from its namesake carbonated beverages. AT&T has also had to deal with competition, although initiatives to broaden its highest-speed Internet service have promising implications for its future.
But perhaps the biggest factor in favor of these stocks is that they haven’t seen the recent share-price gains that the rest of the Dow has experienced. If the downturn continues, then investors might well rotate out of other high-flying stocks into laggards like Coca-Cola, McDonald’s, and AT&T — all of which have seen their share prices decline during the past year.
Obviously, there’s nothing about these three Dow stocks that guarantees that they’re insulated from any further shocks that send the Dow Jones Industrials down further. But at least during this correction, AT&T, McDonald’s, and Coca-Cola might continue to get looks from those who haven’t paid enough attention to those dividend stalwarts for a while.
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