The Dow Jones Industrial Average index has done well this year, helped by the rising hopes that the Federal Reserve will start cutting interest rates. It has also risen as investors cheer the strong first-half earnings and after the United States avoided a hard landing.
The SPDR Dow Jones ETF (DIA), which tracks the index, rose to a record high of $416 earlier this month. It has jumped by 11% this year and by almost 30% from its lowest level in 2023.
However, the fund has underperformed the S&P 500 and Nasdaq 100 indices and has had over $735 million outflows. It has lost assets in five of the first nine months of the year. So, here are some of the worst-performing stocks in the index.
Intel | INTC
Intel has become one of the biggest fallen angels in the United States. The company, which dominated the semiconductor industry for decades, has now been overtaken by so many firms such that it is no longer a top-ten firm.
Intel’s stock has plunged by over 68% from its all-time high and is now hovering at its lowest level in years. It has dropped by over 60% this year, making it the worst-performing Dow Jones Index company this year.
Intel has faced numerous challenges. For example, it acquired Mobileye for $15 billion a few years ago and decided to spin it off in 2023. Today, the company, which Intel holds a 88% stake, has a market cap of less than $9 billion.
Intel has lost market share in the CPU industry from AMD and has no major share in the GPU industry that is now dominated by Nvidia.
Additionally, it has faced several product delays and is investing billions of dollars in fabrication locations in the United States, Germany, and Israel in its goal to become an alternative to Taiwan Semiconductor.
Analysts believe that Intel may struggle to bring in additional customers for its fab segment, meaning that it will likely be used to manufacture its own semiconductors.
The general view is that Intel may need to become a smaller company by selling or spinning off assets for it to remain relevant. This process will likely take time, meaning that the stock may languish for longer.
Boeing | BA
Boeing has become the second-worst-performing DIA ETF company as its stock has plunged by over 37% this year and by 41% from the highest point this year. It has also fallen by more than 63% from its highest level in 2019.
Boeing’s business has struggled because of a series of unfortunate events. Before COVID, it was forced to ground its Boeing 737-Max planes after two accidents. Most recently, it was forced to ground more planes.
The implication of all this is that the company has lost its market share in the civil aviation industry to Airbus, a company that has a better safety record. It has also been forced to spend billions acquiring Spirit AeroSystems, which manufactures parts for Boeing and other firms.
Boeing has also reported substantial losses in the past two quarters and has lost its reputation. These losses are expected to increase after the workers voted to strike.
Read more: The Boeing crisis: will the company make it out alive?
Nike | NKE
Nike, the giant player in the sports apparel and athleisure industries, is the third-worst company in the DIA ETF. Its stock has crashed by over 52% from its all-time high. It is also hovering near its lowest level in three decades.
Nike is facing numerous challenges. Higher inflation has led to weak spending among consumers and rising competition by brands like On Holdings and Adidas has risen.
The most recent financial results showed that the company’s full-year revenue came in at $51.4 billion, up by 1% from the previous year. Its fourth-quarter revenue fell by 2% to over $12.6 billion. The company also issued a weaker forward guidance than expected.
Nike’s stock formed a death cross pattern in September last year, meaning that it has more downside going forward.
Read more: Nike Shares Rise on Ackman’s Return
Chevron | CVX
The other top laggard in the Dow Jones this year is Chevron, the second-biggest oil company in the US. Its stock has dropped by over 7% this year because of the falling oil and gas prices.
Brent crude oil has dropped to $68, its lowest level in over two years. It has dropped by more than 24% from its highest point in 2023.
The other top laggards in the DIA ETF are Salesforce, Honeywell International, McDonald’s, and Dow Inc.
On the other hand, most companies in the fund have been in the green this year. Walmart shares have surged by over 51%, helped by the strong retail sales. The company is benefiting because of the ongoing perception of its cheaper products.
3M stock has risen by over 44% while American Express, IBM, Amazon, Travelers, Goldman Sachs, and JP Morgan have soared by over 21%.
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