The Dow suffered its worst loss of the year and was down for the fifth straight session. Here's how it and the three major indexes ended the day:
|Dow Jones Industrial Average (INDEX: ^DJI )
|Nasdaq (INDEX: ^IXIC )
|S&P 500 (INDEX: ^GSPC )
Why the carnage today?
There wasn't any big precipitating news except the same old European concerns -- this time involving rising Spanish and Italian bond yields. There also could have been some spillover from Friday's jobs report and some momentum from the four past down days. But ultimately (as always), the reason for the drop of a complex marketplace is elusive.
More important for individual investors is earnings season, which semi-officially kicked off after hours today, with Dow component Alcoa's report. That report, at least, was quite favorable. Its shares are up 5.6% in after-hours trading as I write this on the back of an unexpected profit of $0.09 a share.(Wall Street expected a $0.03 loss.)
Google, JPMorgan Chase, and Wells Fargo are other notables reporting later this week.
With the market having some off days and with companies starting to report earnings, it's a good time to go to your Watchlist and look for strong companies selling off for temporary reasons -- like a bad earnings report or a general market fall.
Looking at the list of Dow components, Bank of America (NYSE: BAC ) is down the most (11.8%) in these past five down days. I'm bullish on it, but it's only for those who can tolerate a lot of risk. Looking further down the list for safer droppers, Disney (NYSE: DIS ) , down 6.5%, is always worth looking at. Remember, though, to keep perspective and not to get carried away. It's been only a few down days, and the Dow's still up for the year. Pay less attention to the market and more to buying companies you believe in for reasonable-to-cheap prices.
For more ideas, check out our brand new free report: "5 Stocks Investors Need to Watch This Earnings Season." It details what to look for from Apple and four other must-watch companies as they report their latest results. Access it now.