Ma Bell’s shares were generating a small loss for the year before the recent Washington fiscal agreement pushed it slightly into the black. If the market retreats from the current euphoria by year’s end, AT&T will surely end up posting a down year. 

In fact, short sellers are anticipating such a move.  As I noted last month, both AT&T and Sprint (NYSE: S) have seen rising short interest in recent months. And during the third quarter, the short interest in AT&T rose yet further, to 126 million shares, making it the second most heavily shorted stock on the N.Y. Stock Exchange, behind Bank of America (NYSE: BAC). AT&T is caught in a vise between declining landline exposure, a weak competitive hand in the wireless space, and possible technological obsolescence.

Big Blue just delivered its sixth straight quarter of declining revenues, pushing its shares down to fresh multi-year lows.

What’s wrong with IBM? The company is no longer at the vanguard of technology trends such as cloud computing and Big Data, and it’s increasingly seen as a back-office technology manager handled by legions of staffers in India. Management appears more intent on boosting earnings per share (EPS) through cost cuts and stock buybacks than through organic sales growth — and that’s a recipe for further long-term irrelevance.

This lumbering oil giant only recently moved back into the black for the year, thanks to Washington budget Band-Aids, but as I noted recently, serious challenges for this company remain.

Analysts expect revenue to drop 8% this year, to around $443 billion, and it’s highly unlikely that Exxon Mobil will ever again be seen as a solid revenue growth story — no matter the economic climate.

At first glance, this industrial conglomerate looks to be ill-suited for the Dow’s forward-thinking index makeup. Shares traded for $88 on Oct. 21, 2011, and two years later, are slightly lower.

Yet in this instance, timing is everything. In fact, Caterpillar has very strong exposure to the most dynamic themes set to play out in coming decades:

Infrastructure
Billions need to be spent just in the U.S. according a recent report by the American Society of Civil Engineers. These engineers give U.S. infrastructure a D-minus, and in countries such as India and Brazil, the situation is even more dire. 

In a 2012 interview citing China’s infrastructure spending, Caterpillar’s head of China operations, Richard Lavin, noted that “roads, bridges, airports, sewage systems, energy — all of these are areas that we play in, it’s the core of our business,” adding that “I think we can expect a fairly broad and significant impact across our business.” Caterpillar remains as one of the few companies in the world with the capability of providing all the gear needed in major infrastructure projects.

Commercial And Residential Construction
Asia and Latin America have undergone building booms in the past half decade, but new construction of commercial and residential structures in Europe and the U.S. (which still collectively account for half of global GDP). Yet with expectations of a slow and steady economic upturn in the next few years on both sides of the Atlantic, Caterpillar should start to cite these markets as growth drivers. In recent years, Caterpillar has been mostly talking about emerging-market growth.

Mining
Of course Caterpillar can’t thrive when commodity prices are falling, as has been the case for much of the past two years. Mining budgets have been sharply slashed to preserve cash flow. Yet mining firms know that heavy-duty mining equipment only lasts a few years, and must eventually be replaced.

We’re in the pent-up phase of spending on mining equipment right now, but an upgrade cycle into mid-decade appears inevitable, even if commodity prices don’t move back up to previous peaks.

Agriculture
This is Caterpillar’s least cyclical business, as investments in boosting the global crop yield continues apace. Caterpillar, along with key rivals, has been heavily investing in new technologies (such as GPS-based steering) that not only make its clients more productive but also compel them to consider an upgrade cycle.