Why the Dow Fell Today

As you look through today's headlines talking about why the market fell, you'll probably read about poor economic data bringing down early gains. Consumer confidence moved into negative territory, which spooked investors and caused a late day sell-off. However, investors keying in on today's economic news are missing a more important trend.

The crazy markets that defined 2011 are suddenly gone.

Across last year, the markets often felt like a roller coaster. Up! Down! The U.S. gets downgraded! Europe is collapsing! Buy! Sell!

At times it felt like the world was once again teetering on the verge of a financial crisis. In a way, that acclimated investors to the idea that nauseating market movements were the norm. However, an interesting development is playing out so far in 2012. While the Dow Jones industrial Average (INDEX: ^DJI  ) has risen more than 3% this year, the volatility that defined the market last year is fading away.

Look no further than today's action. The Dow slipped just 0.16% on the day, after nudging down a mere 0.05% in yesterday's action. The real early story of 2012, then, is the sudden death of volatility. The commonly followed Volatility S&P 500 (INDEX: ^VIX  ) , or VIX, is now 60% off its 52-week highs!

Today's Markets

Index

Close

Percent Change

Dow Jones Industrial Average 12,632.91 (0.16%)
Nasdaq (INDEX: ^IXIC  ) 2,813.84 0.07%
S&P 500 (INDEX: ^GSPC  ) 1,312.41 (0.05%)

However, even in a flat market you'll find some losers. So if you're looking for the culprit that drove the Dow lower today, look no further than ExxonMobil (NYSE: XOM  ) . The oil giant met earnings expectations but saw its production fall to 4.53 million barrels of oil equivalent per day from 4.97 million a year ago. Exxon closed the day down 2% and is suddenly worth $25 billion less than Apple in its quest to be the world's largest company.

The stretch of calm across the markets might be a temporary blip. However, if you've become hard-wired to think about the markets as a schizophrenic force wildly swinging between large losses and gains, don't overlook the change that's quietly defined the first part of 2012.

While watching the ups and downs of the market every day can be exciting, real investing success is found by discovering great companies for the long term. If you're looking for a long-term winner to kick off 2012, we've uncovered one such stock with so much promise we've dubbed it "The Motley Fool's Top Stock for 2012" and created a special free report for investors to uncover this soon-to-be rock star. The report highlights a company that is revolutionizing commerce in Latin America, and you can get instant access to the name of this company. Thousands have already requested the report, which is free today, but it won't be forever, so access it now.

Eric Bleeker owns shares of no companies listed above. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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