Why the Dow's Plunging Today

If you've been waiting for stocks to get cheaper, you've been waiting a long time now. But finally, the stock market looks like it's in line to deliver its first big drop of 2012, as reawakening fears about whether the Greek sovereign debt deal will go through combine with renewed potential for a global economic slowdown to deliver a crushing blow to the bull argument. Just before 2 p.m. EST, the Dow Jones Industrials (INDEX: ^DJI  ) were down 197 points to 12,765, while the S&P 500 (INDEX: ^GSPC  ) fell 21 points to 1,343. If the market stays at its current levels, it would mark the Dow's first 100-point drop all year.

As you'd expect on such a down day, there was a lot of red ink among individual stocks. The worst offenders were those that had benefited the most from the bullishness early on this year. Bank of America (NYSE: BAC  ) , for instance, was down about 3% in early afternoon trade as investors weigh the potential fallout if something further goes wrong in Greece. News that Allen Stanford was found guilty on 13 of 14 counts in connection with his $7 billion Ponzi scheme will likely renew the distrust among ordinary Americans of big financial institutions generally.

Caterpillar (NYSE: CAT  ) and Alcoa (NYSE: AA  ) were the worst losers in the Dow, falling between 3% and 4% each. Investors in both materials- and construction-related stocks rely on a continuing global growth picture, and Caterpillar in particular has soared recently on hopes that the worst was over for a potential slowdown. Meanwhile, Alcoa continues to struggle with low aluminum prices and the longer-term threats of substitute materials possibly encroaching on its primary sources of demand.

Never fear
Even on a lousy day for the market, being on the lookout for good stocks makes a lot of sense. Learn about the one stock the Fool's chief investment officer picked to crush the market in this free report: "The Motley Fool's Top Stock for 2012." Instant access is just a click away.

Fool contributor Dan Caplinger doesn't own shares of the companies mentioned. You can follow him on Twitter here. 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.


Read/Post Comments (0) | Recommend This Article (26)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1801529, ~/Articles/ArticleHandler.aspx, 9/20/2014 4:16:19 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement