Top Dow Dividend Stocks: August 2010

The markets shifted back into sell mode in August with the Dow Jones index dropping 451 points. This pushed the Dow index once again back into negative territory for the year. The S&P 500 fell 4.7%, while the tech-heavy Nasdaq fell even more dramatically – down 6.2%.


The bearish tone in the market this month led many investors to look at safer dividend stocks. Within the Dow Jones index, the top performers were telecom’s AT&T and Verizon, along with our top Dow dividend stock in McDonalds.


The biggest surprise of the month was Pfizer. The pharmaceutical giant has languished much of the year, but managed to post a 6% gain in August. Pfizer’s stock is still down 12.5% since the beginning of the year, but investors seem to have taken hope that a Pfizer dividend increase will come in December.


The traditionally low-yielding tech stocks had a horrific month. Scandal-plagued Hewlett-Packard led the decline, dropping nearly 17%. Intel plunged 14% and warned that third quarter sales were weaker than expected. Cisco Systems also posted a double-digit decline, while Microsoft posted a 9% drop. Investors are expecting a dividend increase from Microsoft next month and if the company doesn’t deliver the stock could drop further.


The Dow Jones index is now down 4% in 2010. That’s better than the Nasdaq’s 7% decline or even the 6% drop in the S&P 500, but is a far cry from last year’s 19% gain. Bearish sentiment is very prevalent right now with small investors continuing to exit the stock market altogether. September is traditionally a very weak month for the stock market and could bring additional earnings warnings as weak economic data is pointing to a lackluster recovery.


Top 5 Dow Dividend Stock Gainers:


Pfizer – 6.1% gain

McDonalds – 4.8% gain

AT&T – 4.2% gain

Kraft – 2.4% gain

Merck – 2.0% gain


Top 5 Dow Dividend Stock Losers:


Hewlett-Packard – 16.5% loss

Intel – 14.2% loss

Cisco Systems – 13.4% loss

Bank of America – 11.3% loss

American Express – 10.7% loss

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