Why the Dow Plunged This Morning

Record-breaking earnings from Apple weren't enough to stem a tide of red ink this morning, as fallout from the State of the Union address as well as anxiety about the Federal Reserve's interest rate forecasts cast a shadow on the broader stock market. At around 10:15 a.m. EST, the Dow Jones Industrials (INDEX: ^DJI  ) were down 78 points to 12,597, while the S&P 500 (INDEX: ^GSPC  ) fell 4 points to 1,311.

Defense stocks took a hard hit despite posting earnings that beat estimates. Boeing (NYSE: BA  ) was the biggest loser in the Dow, falling almost 3% even as it announced an $11.4 billion order for 100 of its 737 MAX aircraft and 22 Next-Generation 737-800s from Norwegian Air Shuttle. Meanwhile, United Technologies (NYSE: UTX  ) also saw its shares drop more than 2% even after posting an 11% jump in fourth-quarter profits on a revenue increase of 1%. Both stocks are clearly suffering from the Obama administration's plans to cut military spending.

Bucking the downtrend was American Express (NYSE: AXP  ) , which rose almost 1%. Even as fellow Dow financial stocks dropped in light of a downgrade of Goldman Sachs, AmEx seems to be recovering from concerns last week that falling credit quality could hamper its results in the near term.

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Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. Motley Fool newsletter services have recommended writing a covered strangle position in American Express. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool has a disclosure policy.


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  • Report this Comment On January 25, 2012, at 11:17 AM, temp255 wrote:

    Only a moron and a complete idiot should make headlines as “Why the Dow Plunged This Morning”… Here is the basic question? Is it expected that the DOW should always have positive days…, that every single day it goes up? Of course not!!! Then why when there is some amount of a down day that the world is falling apart. The normal, expected and predicated part of any market is that some days are up others are down. Just look at a Monthly Chart and all the stupid/false headlines of market drama disappears, and a realistic view of market movement is revealed.

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